Life insurance is a financial tool used to provide financial support to a spouse or heirs upon your passing. Wouldn't it be a tragedy if you owned such a policy, but it was never cashed because nobody knew you owned it? This happens all the time and is why letting your family know about life insurance policies you own is absolutely critical.

Life insurance companies make a killing on lapsed policies. These are policies that expire without being cashed. Many times the reason is simply that the person whose life is insured lived beyond the term of the policy. In other situations, the person actually passed away, but nobody made a claim on the death benefits.

Do you know if your parents have life insurance policies? Do your kids know if you have any? If the answer is negative to either question, you could have a huge problem on your hands. Think about it. Thousands upon thousands of dollars have been spent paying premiums for those policies. Wouldn't it be a tad ridiculous to lose the benefits of those policies because nobody knows about them? It happens every day.

Let's be clear. There is no clearinghouse for life insurance policy information. There is no agency you can call if your parents pass away. So, how can someone figure out if there is a policy? It requires some snooping around. One way is to look through the documents of the deceased and see if there is a policy document. Another is to look through the checkbook register to look for past payments. You can also pay a private investigator to go hunting for information. Do most people do this? No.

If you are paying for life insurance, make sure someone benefits from it. Put together a list of your assets and make sure the responsible people know where it is kept. The last thing you want to do is pay premiums year after year and get no benefit from it!