Life Insurance Claims
Life insurance can provide cash quickly to cover funeral expenses and other pressing financial needs. Before payment can be made and collected, the beneficiary must file a life insurance claim with the insurance company. There are a number of steps survivors can take to speed the payment and life insurance claims process. It is important to keep life insurance information in a safe and easily accessible location and know how to claim your family’s life insurance.
Contact The Life Insurance Company
If the life insurance policy was purchased through an agency, broker, or agent, they will act as an intermediary with the company. Contact the agent or the insurance company as soon as possible after the death of the insured person. There are forms that must be completed by the beneficiary or the executor of the estate and the agent or life insurance carrier will provide them. Agents will also help survivors complete the necessary paperwork to file their claim.
If No Insurance Information Is Available
If the deceased person did not leave policy information for survivors, they can contact the Missing Policy Service by mail at the following address:
American Council of Life Insurance
1001 Pennsylvania Ave. NW
Washington, DC 20004-2599
The service will perform a search with over 100 major life insurance companies in an attempt to locate the policy. There is a small fee for this service to cover administrative costs, but it will save time and effort for the survivors in locating policies.
The Death Certificate
A certified death certificate usually must be presented to the insurance company before they will pay out the life insurance claim. In cases where a funeral director provides the final arrangements, he or she will usually supply the family with a legal copy of the death certificate.
If the family did not use the services of a funeral director, the certificate may be obtained for a small fee from the county Bureau of Vital Statistics. Photocopies and faxes are not accepted by insurers.
Why Payment May Be Delayed
If there is any question about the cause or manner of a person’s death, the insurer may delay payment until authorities have completed an investigation. If questions regarding the death arise, some jurisdictions will hold a coroner’s inquest. The filing of a death certificate may be delayed by legal proceedings. Learn more about how to collect on life insurance claims.
In cases where an insured died suddenly or “accidentally” shortly after the policy was purchased, the company may delay payment while conducting their own investigation. Life insurance fraud and scams are illegal, felonies and punishable with huge fines and prison time, resulting in the denial of your life insurance claim and voiding your policy altogether.
Death Benefit Payment Options
The insured person chooses the amount of the life insurance policy and may also choose the manner in which the death benefit is paid. In most instances, the death benefit is paid in a lump sum, but if beneficiaries are minor children, it may be paid in increments. The life insurance company will invest unpaid death benefits and earnings on the investments are also paid to beneficiaries over time. Some death benefits may be paid in an annuity, for an income for the balance of the beneficiary’s life.
Families should review their life insurance policy to ensure they are paid out the appropriate amount. Some policies have Accidental Death Benefit riders or AD&D insurance attached, meaning you may be due more than the face value of the life insurance policy.
Life Insurance Claims
Life insurance companies have requirements that must be fulfilled before a claim is paid. By notifying your life insurance carrier immediately following the death, survivors can expedite the life insurance claims process and receive much needed cash for final expenses, mortgage payments, and other expenses quickly, generally within 30 days of the death.
