Life insurance claims are usually much simpler than people expect. When someone passes away, contact their life insurance agent as soon as possible, obtain a certified copy of the death certificate, and complete the insurance company's claim paperwork. Once the company has everything it needs and approves the claim, payment can often be issued very quickly.
Life insurance claims are usually much simpler than people expect. When someone passes away, contact their life insurance agent as soon as possible, obtain a certified copy of the death certificate, and complete the insurance company's claim paperwork. Once the company has everything it needs and approves the claim, payment can often be issued very quickly.
People sometimes imagine that collecting life insurance is going to involve lawyers, complicated paperwork, and weeks of arguing with an insurance company.
Most of the time, it doesn't.
A life insurance claim is usually a very straightforward process.
Someone passes away.
The insurance company needs proof of the death.
The beneficiary submits a claim.
The company verifies the information.
The death benefit is paid.
There are situations where the company needs additional information, particularly when someone dies during the first two years of a policy. We'll explain that below.
But for most families, the biggest thing we want them to understand is this:
Call your agent immediately, and get the death certificate as quickly as you can.
Those two things can make the entire process much easier.
In Short
- Contact the life insurance agent as soon as possible after the insured passes away.
- If you know death may be approaching, you can contact the agent beforehand so the family knows exactly what to do.
- Obtain certified copies of the death certificate promptly.
- The beneficiary will normally complete a claim form and provide the required documentation.
- Each beneficiary receives the portion of the death benefit designated for that person.
- A death during the first two policy years may receive additional review, even if the policy provided immediate coverage.
- A claim investigation does not automatically mean there is a problem with the claim.
- Once a straightforward claim has been approved and processed, payment can often be issued quickly, although exact timing varies by company, state and circumstances.
The First Call Should Be to Your Agent
When someone you love passes away, life insurance probably isn't the first thing on your mind.
That's understandable.
But when you're ready to begin handling the practical details, we encourage families to contact the insured's life insurance agent as soon as possible.
If we're the agency servicing the policy, we can help determine:
- Which insurance company has the policy
- What policy information is needed
- Who needs to file a claim
- Which forms are required
- Where the paperwork needs to go
- What documentation the insurance company needs
- What the family should expect next
You don't need to understand the claims department.
You don't need to know which form to download.
You don't need to figure everything out while you're grieving.
Call us. That's part of what we're here for.
You Can Even Call Us Before Someone Passes Away
This is something families don't always realize.
If someone is seriously ill and the family knows that death may be approaching, you don't have to wait until afterward to contact us.
Call your agent.
We can make sure the appropriate family members have our contact information and understand what they'll need to do when the time comes.
We aren't filing a claim before someone passes away.
We're simply preparing.
That can remove one more thing from the family's shoulders during an already difficult time.
It's also one of the reasons we encourage our clients to establish emergency contacts when they purchase their policies.
Who Should I Name as the Beneficiary of My Life Insurance Policy?
Get the Death Certificate
This is probably the most practical advice we can give a family after a death:
Don't put off getting certified copies of the death certificate.
The insurance company needs official proof that the insured has passed away before it can pay a death claim.
The death certificate provides that proof.
Funeral homes often assist families with obtaining death certificates, and procedures vary by state and circumstances. But don't simply assume someone else has taken care of it.
Ask.
Find out when the certified copies will be available.
If necessary, find out how you can obtain them directly from the appropriate state or local vital-records office.
We generally recommend obtaining multiple certified copies because life insurance may not be the only place you'll need them.
Banks, retirement accounts, property matters and other financial institutions may also require proof of death.
The sooner you have the death certificate, the sooner you can complete the things that require it.
Who Files the Life Insurance Claim?
Normally, the beneficiary files the claim.
If there are several beneficiaries, each beneficiary may need to provide information and complete the insurance company's required paperwork for that person's share.
Suppose a $30,000 policy has three primary beneficiaries, each designated to receive one-third.
The insurance company doesn't simply decide who gets the money.
The beneficiary designation made by the policyowner determines how the benefit is divided.
Each beneficiary is entitled to the appropriate share according to the policy's beneficiary designation.
If you're not sure how primary and contingent beneficiaries work, we explain that here: Who Should I Name as the Beneficiary of My Life Insurance Policy?
What Does the Insurance Company Usually Need?
For a straightforward claim, the requirements are generally pretty simple.
The company will commonly need some combination of:
- A completed claim form
- A certified death certificate
- Policy information, if available
- Identification or identifying information from the beneficiary
- Instructions for how the beneficiary wants to receive the proceeds
- Any additional documentation required for the particular claim
Don't panic if you can't find the original life insurance policy.
Contact the agent or insurance company.
We can help identify the policy and explain what the company needs.
How Long Does a Life Insurance Claim Take?
A straightforward claim can move surprisingly quickly once the insurance company has received everything it needs.
After the claim is approved and fully processed, payment may be issued within just a few business days.
That doesn't mean every beneficiary will have money in hand within a couple of days of the death.
There is an important distinction between filing the claim and the company having a complete claim ready for payment.
If we're still waiting for a death certificate, beneficiary paperwork or other required documentation, the company can't finish processing the claim.
More complicated claims can also take longer.
That's another reason we encourage families to contact us immediately.
The sooner we know what happened, the sooner we can help get the process moving.
What Happens If Someone Dies During the First Two Years?
This is one of the most important things to understand about life insurance claims.
Many life insurance policies have what is commonly called a contestability period, generally during the first two years after the policy takes effect.
That does not necessarily mean you have a two-year waiting period.
Those are two completely different things.
An immediate-coverage policy can provide the full death benefit from the beginning and still have a contestability period.
If the insured dies during that initial period, the insurance company may have the right to look more carefully at the original application before paying the claim.
The company may request medical records or other information to verify that the health questions on the application were answered accurately.
That's normal.
It does not automatically mean the claim will be denied.
Why Does the Company Review the Original Application?
Imagine someone applies for immediate life insurance and answers the health questions honestly.
The company checks the available underwriting information, approves the application, and issues the policy.
If that person unexpectedly dies a year later, the insurance company may review the application and medical information before paying the claim.
If everything reasonably matches, that review is simply part of processing the claim.
The potential problem arises when the company discovers that important information was materially misrepresented or omitted on the application.
For example, if an application specifically asked about a serious medical condition and the applicant knowingly answered incorrectly, the company may have rights under the policy and applicable law to contest the claim. Depending on the circumstances, that can affect the amount paid or whether the death benefit is payable.
That's one reason we're so serious about answering health questions honestly.
Honest answers don't just help us choose the right company. They help protect the policy when your family eventually needs it.
Why Do They Ask Medical Questions If There's No Exam?
Why Do Life Insurance Companies Check Prescription History?
A Contestability Period Is Not a Waiting Period
This distinction is worth repeating.
Suppose you qualify for a $25,000 whole life policy with immediate coverage.
You pass away from a covered natural cause eight months later.
The fact that you're still within the first two years does not automatically reduce the policy to a return of premiums.
It's an immediate-coverage policy.
The company may review the original application because the death occurred during the contestability period.
If the policy is valid and the application was accurate, the policy's full covered death benefit remains applicable according to its terms.
That's very different from a Guaranteed Issue policy that specifically contains a waiting period for natural death.
We explain those differences in detail here: When Does Life Insurance Coverage Begin?
What About Guaranteed Issue Claims?
Guaranteed Issue insurance is different because there aren't medical questions to answer in order to qualify.
That's one of the things that makes these policies so valuable for people with serious health conditions.
The policy commonly provides full accidental death coverage immediately and uses a waiting period, often two years, before the full death benefit becomes available for natural death.
If the insured dies from natural causes during that waiting period, many policies pay the beneficiary all premiums paid plus an additional amount. Some companies use a formula such as premiums paid plus 10% interest.
After the waiting period has been satisfied, the full death benefit becomes available for covered natural death according to the policy.
There isn't anything shameful or second-rate about using Guaranteed Issue when it's the appropriate product.
It provides a way for someone who might otherwise be unable to obtain medically underwritten coverage to put permanent life insurance in place.
Our goal is simply to check the other possibilities first and see whether an insurance company will offer immediate coverage.
Can I Get Life Insurance If I Have Health Problems?
Can the Funeral Home Handle the Life Insurance?
Sometimes families prefer this approach.
Depending on the insurance company, funeral home and policy, it may be possible for a beneficiary to make an assignment of a portion of the life insurance proceeds to the funeral home.
In simple terms, the beneficiary authorizes the appropriate amount of the insurance proceeds to be used to pay the funeral expenses.
For example, suppose the policy pays $25,000 and the assigned funeral expenses are $9,000.
Under an approved assignment arrangement, the appropriate amount can be directed toward the funeral expenses, with the remaining proceeds distributed to the beneficiary or beneficiaries according to the applicable arrangements.
The exact process varies, so don't assume every funeral home or insurance company handles assignments in exactly the same way.
Ask us.
We can help you understand the available options before you sign anything.
Do I Have to Give the Policy to the Funeral Home?
No.
Life insurance belongs to the policy and its beneficiaries. A family doesn't ordinarily have to turn control of the entire death benefit over to a funeral home simply because the funeral home is handling the arrangements.
You can file the claim directly with the insurance company and use the proceeds according to your needs.
Or, when available and appropriate, you may choose an assignment arrangement to help pay funeral expenses.
The choice belongs to the people legally entitled to make it.
What If There Are Several Beneficiaries?
The insurance company follows the beneficiary designation.
If two beneficiaries are each designated for 50%, each generally receives that person's share.
If four beneficiaries are designated for 25% each, the proceeds are divided accordingly.
One beneficiary doesn't ordinarily collect the entire death benefit and then personally decide how much everyone else receives.
The insurance company uses the beneficiary designation on the policy to determine who is entitled to the proceeds.
That's another reason keeping beneficiary information current is so important.
What If Nobody Can Find the Policy?
Call the agent.
This is exactly why we encourage our clients to make sure several trusted people have their agent's information saved.
Your children don't necessarily need to know how much insurance you have.
Your emergency contacts don't need to know who your beneficiaries are.
They don't need copies of all your private financial information.
But someone should know:
"Jon is our family's life insurance agent. If something happens, call him."
That one piece of information can make things much easier years later.
If the family doesn't know the agent or insurance company, there are also policy-locator resources that may help locate coverage.
But we'd much rather prevent that problem before it happens.
This Is Why We Ask for Emergency Contacts
When you purchase life insurance, most of the conversation naturally focuses on today.
What does it cost?
How much coverage do you need?
Which company should you choose?
But we're also thinking about the day the policy will actually be needed.
Maybe that's 5 years from now.
Maybe it's 15.
Maybe it's 30.
The people handling your affairs then need to know whom to call.
That's why we encourage you to identify two or three trusted emergency contacts and make sure they save your agent's information.
They can also be your beneficiaries, but they don't have to be.
And simply being an emergency contact doesn't mean we're going to disclose your private policy information to them.
Their job is much simpler.
If something happens to you, they know whom to call.
Our Job Doesn't End When You Buy the Policy
This is one of the reasons we place so much emphasis on having a personal agent.
Buying life insurance shouldn't be a transaction where someone sells you a policy and disappears.
Your agent should still be there when:
- You need to change a beneficiary.
- You move.
- Your banking information changes.
- You have a question about the policy.
- Your family needs help understanding what you purchased.
- And, eventually, when the policy needs to do the job you bought it to do.
The claims process may be the most important service your agent ever provides.
You won't be there to make sure everything happens correctly.
Your family will.
We want them to know exactly whom to call.
The Bottom Line
Life insurance claims are usually simple.
When someone passes away:
- Call the agent.
- Get certified copies of the death certificate.
- Complete the required claim paperwork.
- Then let the insurance company process the claim.
If the death occurs during the first two years of an immediate-coverage policy, the company may investigate the original application more carefully. That's one reason accurate answers when you apply are so important.
If the policy is Guaranteed Issue and death from natural causes occurs during its waiting period, the policy's return-of-premium benefit applies according to its terms. After the waiting period, the full covered death benefit is available according to the policy.
And if the family wants the funeral home paid from the insurance proceeds, an assignment may be available to accomplish that.
None of this needs to be intimidating.
In fact, the claims process is one of the reasons we want every client and several members of their family to have their agent's phone number saved.
When that day comes, you shouldn't have to figure out life insurance.
You should be able to make one phone call and have someone who already knows the policy help you through what comes next.
That's what an agent for life is supposed to do.
You Might Also Be Wondering...
When does life insurance coverage begin?
Who should I name as my life insurance beneficiary?
Why do they ask medical questions if there's no exam?
Why do life insurance companies check prescription history?
Can I get life insurance if I have health problems?
Have more questions?
A few common ones that come up alongside this article.
