If you are a beneficiary to a life insurance policy, you need to know how the life insurance claims process works. Because, the benefit will not generate automatically or only by your informing the insurer that the policyholder is no more.
Or, if you are the policyholder, you need to have a clear idea about how to claim life insurance death benefit. It is good to share the knowledge with your family members so that they may not feel confused when the time to claim comes. Lack of knowledge in the process or any mistakes in it will consume your beneficiaries’ time and energy. Unfortunately, most people do not care about the life insurance claims process. They purchase life insurance and pay the premiums as per the schedule.
We have explained here the way insurance claims process works:
The 3 Most Important Documents
A beneficiary will need to get these 3 things at hand when he wants to apply for the benefit:
The policy document;
Death certificate of the policyholder; and,
The claims form
The Policy Document
According to Consumer Reports, life insurance companies owe death benefits to 1 in every 600 beneficiaries who have no idea they were made beneficiaries to policies. While the average benefit figure amounts to $2,000, the highest coverage amounts to as much as $300,000. Insurers could not hand over the money to the beneficiaries because the policies remained unclaimed. This is why, sharing the whereabouts of the policy with the beneficiaries is very important.
Perhaps, you can guess why you need the policy. It is the proof that the insurer owes the benefit to you. As a beneficiary you need it before everything else. It is also advisable that you go thorough the policy and understand how the policy was meant to work for you.
If, as a beneficiary, you are not sure of where the policy is, you need not worry. The policy number will also do. Even when you cannot have either, you still need not be concerned. The agent can help you find it.
In case you are not aware of who the agent is, you still can take help of National Association of Insurance Commissioners that works in the interest of the insured. Their online life insurance company location system can be useful for you. So long, they are providing help to the people of 29 states. You can also take help of National Association of Unclaimed Property Association to find the policy.
But you should start your search with the policyholder’s friends and colleagues.
Life insurance companies, you know, provide benefit typically when a policyholder dies. They need proof that the policyholder has died. This is why you need to produce a certified (not attested) copy of death certificate as the most essential step toward the life insurance claims process. Remember, only an original death certificate is acceptable to the insurer and for multiple policies you will require to submit multiple original death certificates.
You will require to submit to the insurer’s claims department when you are claiming the benefit. Upon payment of a fee, your state’s Vital Records Department will issue a death certificate that will reach you within weeks. Your Funeral Director can help you find it.
After you have found the policy and the death certificate, now is the time for you to get to the action. This is where life insurance claims process actually starts. You can find your claims form from the company website or from the agent.
Besides submitting personal information, here you need to state how you are related to the deceased. You will also need to prove that you are the very beneficiary mentioned in the policy.
The claims process often varies from one company to another. While one company will ask you for some particular document, another may not. We recommend that you have these ready:
The policyholder’s birth certificate
The beneficiaries’ birth certificate
Driver’s license of the deceased
Social Security card
Certificate of marriage
Tax Identification Number
Some Extra but Useful Information
Usually, granting the benefit needs 30 to 60 days from the day you submit the fully furnished claims form.
You need to make sure the claims department of the insurance company has received your papers. You also should keep in touch with them. If you find they are being late, you need to contact them so that you may know what is impeding the process.
Don’t use fluid in the claims from if you make any mistakes. Instead, you should either change it or pen through the mistakes. After you have put in the correct information, initial it.
Insurers do not accept any death certificate wherein the cause of death remains pending. So, don’t apply for benefit until the final report has arrived.
In the event of a policyholder’s death abroad, you will also require to submit the original death certificate. It should often come along with the document named Death of an American Citizen Abroad. Among documents in such an event, you will have to fill a foreign death questionnaire form, submit the cancelled passport, air tickets, funeral bills etc. to the claims department of the company.
If the benefit goes to a trust’s name, you will require to mention the name of the trust as well as your name.
In the event of the change of beneficiary for divorce or marriage, it is required that you submit decrees or certificates.
If the name of the beneficiary has been changed since it was mentioned in the policy, life insurance claims process will require you to provide the legal document.
If the primary beneficiary has already died, the secondary beneficiaries will require to provide death certificate of the primary beneficiary.
Many people fill in the form with necessary attachments and wait for the approval to take place. While this is how it should work, it does not at times happen so. As we have already said, keep in touch with the company. If necessary, meet the insurance officials in person.