More than ₹22,000 crore in life insurance benefits remained unclaimed at the start of FY24, highlighting a growing awareness gap among policyholders and their families, according to Kamlesh Rao, Chairperson of the Insurance Awareness Committee (IAC-Life), and Parag Raja, Member of IAC-Life.

The experts note that these funds do not represent abandoned or forfeited money. Instead, they belong to families, nominees, or legal heirs who are often unaware of their existence due to poor documentation, outdated contact details, or lack of communication within households.

Rao and Raja explain that “unclaimed” money typically includes death claims, maturity benefits, survival benefits, or annuity payments that insurers could not disburse due to procedural gaps.

Common reasons include:

1) Nominees not being informed about the policy

2) Change in address or bank details without updating insurers

3) Lost or misplaced policy documents

4) Policies purchased decades ago and forgotten

5) Families being unaware that a policy existed in the first place

Experts stress that unclaimed does not mean lost. The money remains recoverable.

What happens to unclaimed money

Under regulations, if payouts remain unclaimed for over 10 years, insurers transfer them to a government-managed fund for safekeeping. However, beneficiaries can still claim this money for up to 25 years after the transfer.

When a claim is finally settled, insurers must pay the principal along with the investment income earned during the intervening period.

To improve access, insurers and regulators now provide online search tools, helplines, and grievance platforms where families can check for pending claims and track their applications.

How families can reclaim unclaimed insurance money

Rao and Raja recommend the following steps:

1. Search online databases: Check insurer websites and regulator-backed portals that list unclaimed policies.

2. Contact the insurer directly: Provide the policyholder’s name, date of birth, PAN (if available), and nominee details.

3. Submit documents: Depending on the case, families may need death certificates, identity proof, bank details, and policy records.

4. Use grievance redressal channels: If claims face delays, approach the insurer’s grievance cell or the Insurance Ombudsman.

5. Track claim status digitally: Many insurers now allow real-time tracking through apps or portals.

Industry efforts to reduce unclaimed amounts

According to the experts, life insurers have reduced unclaimed balances by over ₹1,000 crore in recent years through beneficiary outreach and awareness campaigns. However, outdated databases continue to slow the process.

Prevention: What policyholders should do now

Rao and Raja urge policyholders to take proactive steps:

* Keep contact details, bank accounts, and nominee information updated

* Inform family members about existing policies

* Store documents in both physical files and secure digital lockers

* Conduct periodic reviews of insurance portfolios

* Educate nominees on how to file claims

Experts say that ensuring timely payouts requires cooperation between insurers, regulators, policyholders, and families.