How to Trace Unclaimed Life Insurance Benefits?

Life insurance companies have meticulous processes in place to ensure that the various benefits are paid out in a timely and smooth manner. However, have you thought what happens when a benefit is not claimed by the policyholder when it falls due. Or a scenario where the insurance company is not able to pay the benefit as the policyholder is unreachable/untraceable or rather still where the payment is not made as the insurance company has not been intimated about the happening of an insured event (death).

These may look like isolated incidents; however, you would be surprised to know that according to official data, 15,166.47 crore was lying unclaimed with 23 life insurers as on March 31, 2018. Of this, 10,509 crore was with Life Insurance Corporation of India (LIC), and 4,657.45 crore with private insurance companies. Compared to this, for the year 2012-13, Rs 4,865.81 crore was the unclaimed amount for the entire industry. This is a 25 percent increase annually over the past five years in unclaimed money by policyholders. *

Read on to know more.

What qualifies as unclaimed benefits?

Some common examples are as under:

  • Maturity benefit

  • Money back benefit/Survival benefit

  • Refund of excess premium

  • Refund of the amount not adjusted against the policy

  • Amount payable as a death claim

When these are not claimed beyond six months from the due date of settlement of the claim amount, they are referred to as unclaimed benefits.

What are the reasons attributed for unclaimed benefits?

Some major contributors are:

  1. Change of address and contact details: Many policyholders do not inform the company when there is a change in their mailing address and/or contact details. Life insurance is a long-term contract. It is possible that the agent who has sold the policy is also no longer associated with the company when the benefits are due. This makes it very difficult for the insurance company to trace such policyholders.
  2. Not keeping track of policy/poor documentation: It is possible that the policyholder may just lose track of the policy after the premium payment term is over. For eg: Let’s take the example of a short pay policy where the premium payment term is 5 years and policy tenure is 20 years. During the premium payment term, the company sends regular alerts by way of premium intimation notices, receipts etc which serve as a reminder of the policy. But after the premium payment term is over the communication from the company may stop and some people busy in their daily schedules and routines may lose track of the policy and thus not claim the benefits when due.

Also, if such a policyholder changes his address and contact details without intimating the insurance company, the company will be helpless until such time the policyholder or his beneficiaries come forward.

In single premium and short pay policies, it is easy to lose track unless the policyholder is diligent and keeps proper records.

  1. Not informing beneficiary/family: A lot of planning and research goes into buying a Life insurance policy. However, your responsibility does not end with buying the perfect plan. You also need to inform your nominee(s) about the policy and where the policy documents are kept so that they are able to claim it if the need so arises else the entire purpose of buying life insurance is defeated.

There are cases where the policyholder has not informed his beneficiary/family members about his life insurance policy for some reason (conflicts/suspicions etc). A beneficiary who is not aware of the existence of the policy will naturally not be in a position to make a claim.

What insurance companies are doing to reduce unclaimed benefits?

The companies on the basis of IRDAI instructions are now making all payments for amounts greater than Rs 10,000/- only by way of ECS/NEFT/RTGS to the policyholder’s bank account. For policies issued after 2014, it is mandatory for insurance companies to record bank details during policy issuance and make an electronic transfer of funds.

Pension funds were also contributing majorly to the problem of unclaimed funds. Many pension policies had funds which were insufficient to purchase the annuity. Vide it’s circular dated August 3, 2018, IRDAI relaxed the rules on pension products and allowed policyholders to completely withdraw the accumulated amount if it was not sufficient to buy the minimum annuity as per the annuity rules. The circular cited that this was one of the reasons for unclaimed money with the insurance companies.

How to trace unclaimed insurance benefits?

Life insurance companies now provide details of unclaimed benefits on their website. You can identify the insurance details by entering the details like name of the policyholder, date of birth of policyholder, PAN of the policyholder (optional) or policy number(optional). The insurance companies have to update information pertaining to unclaimed amounts on their websites on a half-yearly basis. 

If the insurance company’s website shows unclaimed amount against a policy, the policyholder or beneficiary can approach the company with the policy document and Know your customer (KYC) details. The insurance company may seek additional documents/verification to prevent frauds.

What happens if the amount is not claimed?

As part of the Finance Act 2015, the government introduced the Senior Citizens’ Welfare Fund Act, 2015 (SCWF). According to current rules, all insurers having unclaimed amounts of policyholders for a period of more than 10 years have to transfer the same to the Senior Citizens’ Welfare Fund (SCWF). This fund aims at promoting the welfare of our senior citizens.

Further, as per IRDAI, policyholders/ beneficiaries shall be eligible to claim the dues under their policies up to 25 years from the date of transfer of the same to SCWF by the concerned insurer. If no claim is made up to a period of 25 years after transfer to the SCWF, such amounts shall escheat to the Central Government, in terms of Section 126 of the Finance Act, 2015. The policyholder or beneficiaries cannot claim the dues after that.


A little diligence on the part of policyholders by updating the insurance company about any changes in their address and contact details and by keeping their beneficiaries informed about the policy can go a long way in addressing the issue of unclaimed benefits. After all, what is the use of having a life insurance policy if you or your loved ones cannot enjoy the benefits?

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