If a loved one passed away untimely, you may be grieving and not be able to focus on your financial affairs. Many people who lost a family member go through a difficult time of readjustment and do not deal with life insurance issues immediately.
In other cases, family members may not even know there was a life insurance policy in place at the time of their loved one’s death and discover a policy several years later.
Whatever the case may be, if there was life insurance coverage at the time of the insured’s death, a claim should be filed.
How to Claim Life Insurance Benefits After Death: The Process Flow
The good news is that claiming life insurance benefits is quite straightforward and easy once you know what you need to do. Here are the steps you should follow:
1. Find out the details of the policy
Before you file a life insurance claim, you need to know you are either the beneficiary on the policy or otherwise entitled to collect, for example, as the next of kin if no beneficiary was selected.
If you find a copy of the actual policy, you can see whether you are named as a beneficiary. Hopefully, the policy reflects the most recent beneficiary designation. In some cases, insureds call the insurance company to change the beneficiary or fill out the beneficiary change form online and do not have a paper copy of the new beneficiary designation. Confirming your status as a beneficiary on a policy may be easy if you know which company the policy is with. Contacting the insurance company with this question is the first step.
Not knowing what company the policy is with may present a slight problem. If an insured had group life insurance coverage through work, human resources personnel may help locate the policy details. If an insured purchased a policy independently from a life insurance company, it may be helpful to examine bank statements to see to which insurance company the premium payments were made.
2. Obtain copies of the death certificate
In order to file a claim for the proceeds of a life insurance policy, a certified copy of the decedent’s death certificate is required. A death certificate is a necessary document that serves as proof of death. It may be obtained through the funeral home or the vital records department. If the insured is missing but has not been declared dead, the insurance company may require a court order showing that the insured is presumed dead.
3. Contact the life insurance company
Notifying the insurance company as soon as possible after a loved one’s death may expedite getting your life insurance claim paid. If you know the name of the agent who sold the policy to the policyholder, he/she may help getting through to the claims department. With employer provided life insurance coverage, contacting the human resources/benefits department at the decedent’s place of work will help start the life insurance claim process.
4. Gather the documents
The following is a checklist for life insurance claims.
- Death certificate and all supporting documents. Proof of death is necessary when filing a life insurance claim. You will need a certified copy of the death certificate, a police report, a toxicology report, an autopsy report, a coroner’s report, a medical examiner’s report and in some cases, medical records.
- Original Policy. If you can find the original life insurance policy, you can see the details (payment amount, beneficiary, insurance company contact information, etc.) of the claim before filing it. You can still file a claim if you do not have the original policy.
- Completed Claim forms. Claim forms are documents sent to you from the insurance company. They ask you to provide detailed information about the insured person and your information. On the claim form, you can select how you would like to receive your life insurance payout.
How long do you have to file a claim?
Every life insurance policy has a time period during which the beneficiary can file a claim. If you miss that time period, your claim for benefits may be denied. However, there are many scenarios when you can still recover those denied benefits. An experienced life insurance attorney will help you recover denied benefits even if you missed the deadline to file a claim.
How long does it take for life insurance to pay out?
Generally, a life insurance claim examiner is assigned to work on a claim. If additional documents are needed, the claim examiner must notify the beneficiary promptly to avoid delays in processing the claim.
Once a claim is filed and all the necessary documents are submitted, the insurance company needs to make the final determination on the claim within 30 days. If more than two month have passed since you submitted all the documents and you haven’t collected the benefits, the claim is considered delayed. Fortunately, insurance companies are encouraged to pay out quickly if they want to avoid interest charges on unpaid benefits.
Can a Life Insurance Claim Be Denied or Delayed?
Life insurance is a contract where the policyholder is expected to provide correct medical and financial information. And since life insurance covers the probability of a person dying, the higher this probability, the higher the premium. Some people, in order to avoid a high premium, do not disclose all their medical information.
These claims, when contested, are often denied by insurance companies. Non-disclosure of material facts on the application is one reason insurers investigate all claims where the insured died within the first two years of the policy issue date.
Read more about the reasons why life insurance claims are denied or delayed.
Collecting Life Insurance: How to Avoid Life Insurance Claim Delays or Denials
Even if your claim is based on all correct information and full disclosure, the insurance company may take months and sometimes years to complete the investigation. That is, if they don’t find reasons to declare you ineligible. Many people give up on filing a claim after an insurance company tells them they should not file a claim, because it will be denied.
There are several things you can do to avoid unnecessary delays in claim settlements.
1. Provide correct information
As a policyholder, you have a responsibility to provide correct information on your life insurance application.
While completing your application form and then while signing an insurance contract, you should provide all information requested by the insurer in good faith since you will be held responsible for making a material representation that will impact the risk under the insurance policy.
For example, if you are suffering from high blood pressure, you should disclose this fact at the time of buying the insurance policy. When you do not disclose your high blood pressure or any other condition and in case of your untimely death, your beneficiary’s claim will be denied and the policy will be cancelled due to material misrepresentations on the application.
2. Designate a beneficiary
In most cases, the insurance company is discharged of its liability once it pays the proceeds of the life insurance policy to a beneficiary designated on the policy.
When the insured designated someone to get the benefits at the time of death, claim benefits are disbursed in favor of that beneficiary unless there is a legal dispute. If you fail to designate a beneficiary, your family may have disputes about who should receive the benefits which will most likely result in delays and litigation.
All insurance companies ask for evidence that the claimant is the correct person entitled to receive the proceeds. In case there is no beneficiary, benefits are paid according to the succession provisions in the policy.
3. Pay premiums on time
You must pay your premiums on time to avoid policy lapse. While you are paying for your policy, in case your contact details or address changes, you should get it updated in the records of your life insurance company.
In some states, you can designate another person to receive premium-due notices from the insurance company.
4. Provide required documentation
As a beneficiary, to expedite the claim, you should submit all documents to make a claim.
You may be asked to give the insurer documents related to the policy and documents to prove that the death does not fall under exclusions mentioned in the policy contract. You may also be required to prove your identity.
An insurance company cannot settle a claim until all documents are submitted. In case original documents cannot be produced, the claimant is expected to obtain certified copies of all documents.
It is also a good idea to submit all the required claim documents together, because delay in submission may lead to delay in claim decision.
Consult With a Life Insurance Attorney to Understand Your Legal Rights to Death Benefits
In sum, common issues that can lead to delay are nondisclosure of facts at the application stage, beneficiary designation not complete at the application stage, a dispute between a claimant and family members, unconfirmed cause of death (e.g., suicide cases where police may take some time to certify the final cause of death) and murder cases, where nominee is suspected to be involved in death of the insured.
If an insurance company told you that you would not be eligible for any life insurance benefits, because of the time lapse between the insured’s death and your inquiry, please call our life insurance lawyers for a free consultation.