A life insurance policy provides a death benefit to survivors at the time of the policyholder’s death. In most situations, the process of filing this claim is easy to do. However, insurance companies need to have verifiable information about the death to ensure it is appropriate to release the funds.
In some cases, proving death for life insurance can become a bit more difficult than expected. Your life insurance agent will work closely with you throughout the process. What can you do to make the process easy?
Finding a Life Insurance Policy
If a loved one has a life insurance policy, the beneficiary listed on it should know of its existence. There is no nationwide database to track down any policies out there when a person dies. For this reason, communication before death is essential.
Sometimes, an attorney will maintain the policy. In other cases, it may be through employers or human resource managers. In some cases, they might not contact the beneficiary to notify them of a death. It might be up to the beneficiary to know that a policy exists, and to know who to call when it’s time to file a claim.
Contacting and Filing the Claim
Once you have the policy in hand, the beneficiary can file a claim with the agent. This is much like filing any other insurance claim.
The beneficiary will contact the agent. The agent will gather information about what happened, and he or she will need proof. This usually comes in the form of a death certificate.
Most of the time, local governments, health departments or other agencies handle the death certificate. They issue it within 30 days of the death, in most cases. However, it can take longer when the case is not as clear-cut. For example, if there are concerns about the cause of death, this will delay the process.
The insurance agent needs to learn this information, too. Most life insurance policies have some limits. For example, they may not provide coverage if the deceased was the victim of a murder or a suicide. This is why the death certificate becomes critical, to prove that the deceased did not die because of an excluded cause. Anything slowing this down will slow down the payment of funds.
Most of the time, the process is very fast. You contact the agent. The agent processes the claim. The death verification takes place. The policy verification exists. The life insurance company verifies the beneficiary’s identification. And, then the claim settlement occurs.
Life insurance does not go through probate court, and it is not dependent on a will to pay out. Rather, the funds go directly to the person listed on the policy. For this reason, most policies will pay out within a few weeks of the loved one’s death. This helps families get the funds they need right away.