According to an article by Paul Sullivan for The New York Times, hundreds of millions of dollars in life insurance is currently sitting with insurance companies or the unclaimed funds offices of each of the states. For example, since 2000, the state of New York has received over $400 million in unclaimed life insurance, and the state of Florida currently holds about $1 billion in unclaimed funds, $355 million of which is life insurance.
Depending on state law, the insurance can sit anywhere from a few years to over ten years and if the beneficiaries can't be found, then the funds will escheat to the state where the deceased person lived at the time of their death. In New York one unclaimed life insurance policy has been sitting in the state's coffers since 2004 and is valued at a whopping $1.7 million. One reason the problem is so prevalent is because with some types of insurance the policy will continue to retain a death benefit even if the policy owner quits paying the premiums. And contrary to popular belief, there isn't a national "life insurance claims hotline" that one can call to inquire about any insurance proceeds that may be due and payable.
If you think that a deceased loved one may have named you as a beneficiary of a life insurance policy but you can't find the policy, then check with the unclaimed funds office of the state where your loved one lived at the time of death.