Life insurance is one of the most anxiety inducing types of financial arrangements for many people. It is not uncommon for people to feel unsettled while they are purchasing the policy and setting up a beneficiary; the beneficiary will often feel uncomfortable discussing the policy with the insured. There is a good chance when it comes time for the beneficiary to make the claim he or she will still be grieving and hurt or angry that the claim needs to be filed at all. As disquieting as life insurance can be for some people, it is one of the single most important types of insurances. It provides the future of the loved ones who were financially dependent on the deceased. Without adequate insurance many families find themselves not only emotionally devastated about their loss, but also drowning in turbulent financial waters.
Just as it is essential to have life insurance, it is essential to be informed about the process of handling the insurance claim. Being prepared and knowledgeable about what to do, will allow you to act more quickly and decisively and will ultimately save you extra turmoil and frustration. It may even help you get your benefit, and the financial relief you need, that much sooner.
Before the Person Passes
As with so many things in life, the process of handling a life insurance claim will go much more smoothly with some preparation before the situation arises. Life insurance has a big advantage over traditional inheritance of property or money in that it is not considered part of the deceased’s estate and thus does not need to go through probate. This can be very important since, depending on the circumstances, probate can be a very lengthy process, during which family members are typically unable to access the deceased’s bank accounts or sell property to cover expenses. Instead, since life insurance is considered a financial contract, independent of the estate, it can be paid out immediately regardless of other proceedings. For most to benefit from this advantage it is important to do the following before the person dies:
Never keep life insurance policies in a safety deposit box. Just as other assets are typically frozen for a period of time after the person dies, so too are their safety deposit boxes. That means that right when the beneficiary most needs the information it could be unavailable if it was being stored in the deceased’s safety deposit box. Instead, keep the policy and related documents in a safe place, other than a safety deposit box, that can easily be accessed by the beneficiary.
Discuss Life Insurance with the Insured. It is important for those who will be left behind to have full knowledge of what their situation will be like. As difficult as it may be, you need to have the conversation about what policies are in place, how much coverage the person has, and where the policies are stored.
If the person is already seriously ill it will probably be too late to add anymore life insurance. Thus, if you have the luxury of time on your side, you need to be certain to make these arrangements sooner rather than later.
Contacting the Insurance Company
Once the person has passed it will be time to notify the insurance company. If possible contact the insurance agent who sold the policy. This person can act as an intermediary between you and the insurance company and can help walk you through the process of filing your claim.
If you do not have the insurance agent’s information, or if they are no longer with the insurance company, then you should contact the insurance company directly. The life insurance policy should have the relevant contact information included and the customer service agent will be able to look up the necessary information with your insurance policy number.
If you do not have contact information for the insurance agent and you also cannot find a physical copy of the life insurance policy there are still steps you can take. If you know the life insurance company you can look up their contact information separately. If you provide them with the deceased’s name, date of birth, address, and other related information they should be able to access the needed information.
Obtaining the Death Certificate
The single most important and versatile document throughout the process of handling the deceased’s financial affairs will be the death certificate. You will need a copy of the death certificate to file all insurance claims. Most companies are also likely to require a copy of the death certificate before they will transfer ownership or title of the deceased’s property.
If you are the deceased’s spouse or next of kin, then you will likely receive the death certificate in the natural course of things. If you do not receive it, or you need additional copies, you can contact your local coroner’s office for assistance. They will either be able to provide you with the death certificate or instruct you about how to obtain it.
Submitting Your Claim
It is likely that in addition to the death certificate the insurance company will also have a notification of death form as well as additional paperwork. Once everything has been completed you can expect payment of the claim within a couple of weeks in most ordinary cases. However, if the deceased died under unusual circumstances or if there were other extenuating circumstances, it is possible that the insurance company will conduct an investigation prior to paying the claim, which could extend the length of time it takes to receive payment. You should check the terms and conditions of your particular policy for details.
There is nothing in life quite as painful or difficult to get through as the loss of a loved one. An insurance claim could never make up for your loss. A life insurance payout will help you pick up the financial pieces and begin to make progress toward getting your life back in order. Being informed about the process of handling a claim is an essential part of that equation.