How to File a Life Insurance Claim
Following the death of an insured loved one, it is important to file a life insurance claim in a timely manner. There is paperwork involved, and the process may seem burdensome at such a difficult time. However, beneficiaries must file the necessary paperwork in order to receive their funds, comply with the law and meet tax guidelines. When faced with this process, it is important to know what to do and have a checklist available. This will help beneficiaries make sure they are doing everything necessary to complete the process efficiently.
Contact an Agent
The first step in filing a claim includes a call to the life insurance agent. Ask what paperwork is required. If a loved one's policy was part of a workplace benefits package, it is also necessary to contact the deceased's previous employer to obtain information about any specific steps to take.
Learn More About the Policy or Policies
When filing claims, some people may not know what types of insurance a loved one carried. Credit card companies offer special life insurance policies, so check with the deceased's card sponsors for existing coverage. Group life insurance policies are sponsored by employers. Some private financial institutions also offer a variety of life insurance policies. It is important to obtain data about all of these and understand the differences between the various types of coverage. To find these policies, review the deceased's credit card records, bank statements and employment records. Also, it is helpful to check files or folders with stored information.
Additional Life Insurance Provisions
Some additional specialized types of life coverage a person may carry include mortgage life insurance, travel life insurance, credit life insurance and accidental death coverage. Each type comes with it's own benefits and fine print, which must be reviewed carefully. In many cases, part or all of remaining account balances may be covered. If any of these types of insurance may be relevant to the deceased and cannot be found, contact lenders to ask about death benefits before filing a claim.
Organize the Paperwork
Contact the funeral director handling the final arrangements to obtain a certified copy of the death certificate. If the deceased was a spouse, a copy of the marriage certificate will be helpful to include. Any relevant loan paperwork, employee insurance information or credit card statements are also helpful. Make sure the death certificate that is submitted is a certified copy and not a photo copy. A proof of death form must also be submitted. To obtain this form, contact the insurance agent. The agent will also provide instructions for filling out the form and any other necessary insurance paperwork.
Choosing a Benefit Disbursement Plan
With most policies, the benefits can be distributed in four ways. Many people choose a lump sum, which means the entire benefit amount is provided in a single payment. There is also a specific income provision, which means the company pays the beneficiary both the interest and principal using a set schedule of payments. With an interest income option, the life insurance company holds the proceeds and pays the beneficiary interest on the sum. The entire benefit amount remains the same and is disbursed to a secondary beneficiary upon the death of the initial beneficiary. A life income option is another choice. With this option, the beneficiary receives a set income for life. The amount depends on the benefit sum, the beneficiary's age and the beneficiary's gender at the time of the policyholder's death.
Processing the Claim
After the claim has been submitted, processing usually takes about one week. Insurance companies must analyze the claim, confirm the policy and ensure requirements are met. If requirements have not been met, the process will take longer. During the delay, additional information will be collected. For answers to any questions regarding claims, discuss concerns with an agent.