Though most people take out life insurance policies with the intention that the funds will go towards supporting their beneficiaries or covering their funeral expenses, some policies are never claimed, according to the New York Times.
The newspaper recently highlighted the large number of unclaimed policies, which sometimes are the result of an insurer being unable to locate a beneficiary or being unaware that the policyholder has died.
The unclaimed benefits go to the state, which usually posts the information in order for citizens to locate and retrieve payouts. However, it is a lengthy process, and much of the funds still remain in its possession. In New York, for example, the state has received $400,287,736 in unclaimed life insurance since 2000, yet only $64,772,228 has been paid out, the source says.
People who believe they may be the beneficiaries for unclaimed insurance policies have limited options, according to the Times. A potential way to recover the payouts is by using tracers - people who will look through public records to find information on abandoned assets in exchange for a portion of recovered funds.
Only 70 percent of American households had life insurance in 2010, despite the importance of payouts in the event of a family provider's death.