When it comes time to take out Life Insurance, your policy should be accessible to your beneficiaries. While you are the one applying for Life Insurance, it’s your loved ones who will ultimately benefit from your policy.
But, before you apply, have you considered what could happen if your life insurance goes unclaimed? While it could become an unclaimed life insurance policy, there are still ways you can avoid that happening and ensure that your loved ones are supported, even when you’re no longer around.
Unclaimed Life Insurance in Australia
In Australia, there is approximately $1.5 billion of lost money to be claimed from bank accounts, shares, investments and life insurance policies [1]. From that amount, nearly $5 million is attributed to unclaimed life insurance policies [2].
Life Insurers (like Budget Direct) are required to report any unclaimed money to the Australian Securities & Investments Commission better known as ASIC.
What happens to unclaimed insurance policies?
There are several reasons why Life Insurance goes unclaimed. The beneficiary may not know there’s a policy in place, they may have relocated, changed their contact details, and are unable to be found or, in an unfortunate set of circumstances, they may have also passed.
Unclaimed Life Insurance Database
You can find unclaimed money using Money Smart’s money search tool. Unclaimed money received by ASIC is available to be claimed at any time with no time limits on claiming.
If you successfully locate an unclaimed life insurance policy using the money search your next step is to lodge a claim. It generally takes up to 28 days for the money to be sent back to a Life Insurance company before they can pay the beneficiary.
Avoiding Unclaimed Life Insurance
Keep your Life Insurance policy documents safe
If you’re looking to keep your policy documents safe you can start by keeping the document in a safe or another secure area. And if you have an electronic version of your policy documents ensure that it’s password protected.
Update your details
Make sure you keep your details up to date and let your insurance provider know if you’ve changed your email, your phone number or your name. This applies to your beneficiaries’ details too.
Make sure your Will is up to date
Keep your Will up to date, and ensure it has the correct information with instructions on how the proceeds are to be distributed. This is particularly important if your Life Insurance will be paid to your Estate instead of a named beneficiary.
Significant life events, such as marriage or the birth of a child are great opportunities to review you Will.
Check your super
If you have Life Insurance cover through your super then make sure the details listed on your super policy and your beneficiaries’ information are updated every three years. You should also make your beneficiaries and loved ones aware of this arrangement.
Life Insurance You Can Claim On
With Budget Direct, you or your beneficiaries can claim on your Life Insurance policy by contacting us on 1300 220 627. We’ll guide you through what you need to know and refer you to NobleOak (your policy’s underwriter) for the remainder of the claims process.
