When your loved one dies, the pain is always unbearable & devastating. Here the Life Insurance Claim process will help add to that feeling of grief & finality.
But try to be strong, and know that your departed loved one once had a life insurance policy that will assist you during financial difficulties.
Let’s consider the life insurance claim process step by step for you to know what to do at the appropriate time. See the first step in the following section.
Step 1: Discover Which Life Insurance Company Holds the Policy
Life insurance companies can’t just pay a death benefit once a policyholder dies. Firstly, you need to file a claim, which is why it’s important for policyholders to allow beneficiaries to know that life insurance policies exist.
Unfortunately, if they are unaware of the policy’s existence, beneficiaries won’t know that they are owed a death benefit.
Filing a life insurance claim is way easier if you know the life insurance company, as you know the company, it removes a significant barrier in filing a claim.
How about you didn’t find any information about a life insurance policy? Below are the tips from the California Department of Insurance.
- Review the person’s bank accounts and canceled checks to see if there are payments to a life insurance company.
- Look through the deceased person’s records, including safety deposit boxes, for policies.
- Contact the person’s previous employer to see if the deceased had a group life insurance policy through the company.
- Review income tax records for information about a life insurance policy.
- Check with your state’s Department of Insurance and see if they have a database or can help you track down the information.
- Try to track down the information using the National Association of Insurance Commissioners’ Life Insurance Policy Locator Service.
Filling a claim quickly guarantees you access to still be paid many years later, provided that the policy is still active at the time of death.
Insurers around the world are now required to check their policyholder lists against the Social Security Administration’s “Death Master File“, which catalogs U.S. residents who died, and make an effort to find the beneficiaries.
And this way, many people are finding out that they are owed money. See the next step below to take action.
Step 2: Obtain the Death Certificate
A certified death needs a certificate in order to file a life insurance claim. Getting a certified death certificate is not a problem, you can always get it from a local health department, meanwhile, the funeral home might help you track it.
It’s appropriate to get multiple certified death certificates, which you may also need to close accounts & utilities. The life insurance company in charge will surely request for a certified death certificate, and not a photocopy.
Step 3: File an Insurance Claim with the Life Insurance Company
Once your death certificate is ready, you’re ready to file an insurance claim. This can be done online. However, if you don’t have the option to carry out the claim online, you can contact the life insurance company directly.
Additionally, you’ll likely need these necessary requirements/information:
- Name of insured
- Date of death
- Cause of death
- Place of death
- Your name
The life insurance company will secure the information you provided and with time review the claim. See the last step in the following paragraph.
Step 4: Know How to Get the Life Insurance Payout
You can select any of these ways to get a life insurance payout:
Find out more about these ways in the link above. Then pay more attention to the following subheading.
How Long It Takes to Get a Life Insurance Payout
Payments on a life insurance claim can happen fast, regardless of the type of life insurance it is, be it term life insurance, whole life insurance, or universal insurance policy.
Amanda Wallace (head of insurance operations at MassMutual mentioned:
Generally, once all the claim requirements are received in good order, a settlement is processed within seven to 10 business days.
For instance, Haven Life strives to pay out death benefits within 24 hours of receiving a certified claim.
Northwestern Mutual takes five to seven business days to review a claim. Meanwhile, a life insurance payout could be quick or slow depending on which company issued the policy.
Potential Problems With the Life Insurance Claims Process
A life insurance claim process is normally straightforward, however, there’s a chance that you’ll face speed bumps along the way, which include a denied life insurance claim.
Here are some potential issues you should consider:
You were no longer a Beneficiary
On a normal slate, a policyholder is not authorized to inform you if a beneficiary has been changed. The policyholder may have changed their mind or decided to put the proceeds into a trust, mainly if there’s more than one beneficiary.
If you’re not considered a beneficiary, finding out who is needs legal action. Life insurance companies cannot disclose such information to people who are not parties to the insurance contract.
Even if you take the matter to court, it might not be in your favor unless you can prove that a proper procedure was not followed, a beneficiary change was made under duress or the policyholder was influenced for their own gain.
Policyholder Stopped making Payments
You might discover that before you die, the policyholder stopped paying premiums and allowed the policy to elapse. If so, then, do not hesitate to move fast to reinstate the policy. Often, insurers offer a grace period of 30-60 days.
Policyholder Dies During the Contestability Period
Once a beneficiary bumps up a two-year window of contestability by the insurer, it could be an issue if the policyholder leaves out critical information while applying for the policy.
And then after two years, the contestability issues will generally go away. And here there’s no time limit on getting paid if you’re owed the money.