When people lose a loved one, they usually go through a difficult readjustment during which financial matters such as life insurance and estate matters may be put on hold. Sometimes the beneficiary may not even know the decedent had life insurance or named them as a beneficiary. What happens when they discover there is life insurance months later? Can they still file a claim?
What Is the Timeframe for Filing a Life Insurance Claim?
Generally, there is no single rule for when to file a life insurance claim. Every policy has a provision outlining a timeframe for when it is allowed to file a claim. However, if there are circumstances preventing the beneficiary from filing a claim during the period set out in a policy, the beneficiary may still be able to file a claim later explaining their inability to file timely.
There are many reasons why beneficiaries do not file their claims timely:
Don’t know what insurance company issued the policy
Beneficiaries may know a policy exists, but have no idea where to locate it. In these cases, it is best to do some investigation as soon as practicable. If the insured is a family member, look through their bank statements or credit card bills to see where the premium for the policy was sent, go through the deceased person’s mail or email and see if there is any correspondence from a life insurance company. You may even try contacting several life insurance companies and provide them with the decedent’s information to see if there is a policy for this person in their records. Finally, if the insured was employed at the time of death, chances are he/she had employer-provided life insurance coverage. Calling the employer’s benefits department may provide some clues.
Don’t know they are beneficiaries of a life insurance policy
Unless the decedent shares this information with you, you may not know you have been named as a beneficiary. Moreover, you may not know that if you have been named a secondary (contingent) beneficiary and the primary beneficiary is deceased or revoked, you have the right to file a claim.
Read more about your rights as a beneficiary of a life insurance policy.
Don’t know a policy existed
If a relative or a friend had a life insurance policy and named you as a recipient but never shared this information with you, you may not find out about this until years later. Unfortunately, many life insurance policies have gone unclaimed because insurers made no effort to locate beneficiaries or find out if the insured died. Many states are passing legislation requiring life insurance companies to use the Social Security Administration’s “Death Master File” (DMF) database to identify life insurance policyholders who have died and whose beneficiaries are owed payments.
Were told by an insurance company not to file a claim
Sadly, this happens far too often. A person may have a valid life insurance claim, but an insurance company’s representative, after getting some facts on the phone, may wrongfully say the claim will not be paid. For example, a beneficiary is a former spouse of the insurance. She called the insurance company to get claim forms after her ex-husband’s death and was told she is automatically revoked as the ex-spouse and cannot file a claim. The ex-wife may not be revoked because the state where the policy was issued and where they lived may not have such law, the claim may be governed by federal law or she may have a divorce decree obligating the insured to keep her as a beneficiary.
We recommend everyone who was told by an insurer to not file a claim to have a consultation with a life insurance attorney. Here’s how we won
Read more about an ex-spouse’s rights to life insurance money and how we won a case where our client was denied death benefits due to no longer being married to the deceased at the time of his passing.
What Happens If You Don’t Claim Life Insurance Benefits
The National Association of Insurance Commissioners (NAIC) reports that millions of life insurance benefits are left unclaimed every year. If a life insurance policy is not claimed, the insurer will turn the funds over to the state’s unclaimed property office. Beneficiaries will then need to contact that state’s unclaimed property office to get the benefits.
While there is no certain deadline to claim life insurance benefits on a valid policy, there are deadlines for when to dispute a denied life insurance claim or sue an insurance company. Statutes of limitations for denied claims vary from state to state. We advise beneficiaries who had their life insurance claim denied to consult an attorney as soon as possible to ensure the statute of limitations does not pass.