The worst thing has happened. Your parents, wife, husband or another loved one is gone. The beneficiary has the responsibility of contacting the insurance company to collect on the life insurance. This is why it’s so important to ensure that your beneficiaries are aware of this.
If you are a life insurance policy beneficiary, you first need to find out which insurance company you need to contact. You can find this out by locating a copy of the policy in the deceased person’s home or in their important papers that could be stored in a safety deposit box or other location. If you are unable to locate the insurance documents, you will need to wait for the insurance bill to show up or automatic payment withdrawn from the checking account. Then you can contact the insurance company.
A death certificate will need to be give to the life insurance company. Most insurance companies pay the death benefit within a few days to few weeks unless there is some sort of suspicion that fraud has occurred. In most cases, the money will be available fairly quickly in order to pay for the funeral and other financial matters quickly.
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If the insurance policy has lapsed, it could be a tough situation. If the policy lapsed due to the insured’s death, the date that is on the death certificate can be used to help you collect on your claim to the insurance company without difficulties. If the deceased person had stopped paying the premiums, you might be able to collect some reduced value on the policy, however in other cases you will be out of luck.
If the deceased person died a long time ago, will it be too late for you to collect? What if you find a policy in the bottom of some drawer twenty years after your late husband died and you never knew about the policy? You might still be able to collect. In some circumstances the insurance company when they heard of the insured’s death will have turned the funds over to a government or other type of agency to monitor. If this occurred the insurance company will tell you who to contact. Insurance benefits do not have statues of limitations.
What if the insurance company went under? Will I still be able to get my money? In this case, unfortunately no is the answer. If the insurance company declared bankruptcy, this provides the insurance company protection from individual attempting to collect on insurance policies that were originally financed by them. It may seem unfair, but unfortunately it’s the law.
Sometimes there are difficult circumstances that surround insurance policies as well as collecting when the insured dies. However most collections are smooth and occur without a lot of hassle. If you have a loved one who has passed away the insurance company doesn’t want to make things harder for you during this difficult time.
