It is an extremely difficult and emotional experience to lose a loved one. Before you even have a chance to grieve your loss, you have to start concerning yourself with getting a life insurance claim filed. If you are the beneficiary of the deceased on her or his life insurance policy, then the responsibility for initiating the process is yours. When you need to file claim for life insurance, here are the necessary steps you need to take.
1. Provide Proof of the Death
Until you are able to provide the insurance company with proof of the death, the insurance claim is not going to proceed. You should be able to get a certificate from the facility or hospital where the death of your loved one occurred. If not, you may need to have the director of the cremation service or funeral home help you get a death certificate.
2. Contact the Underwriter of the Life Insurance Policy
Contact the insurer who underwrote the life insurance policy for the deceased right away if you know which company it is. Ideally, the best person to contact is the insurance agent responsible for originating the policy if this person is still employed by the insurance company. When meeting with the agent, bring a copy of the life insurance policy. You will need to surrender the policy in order to get the insurance benefit. Bring along your ID as well. You will need that when you file the life insurance claim.
3. Be prepared to wait for an investigation to be completed
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Most life insurance claims will involved an investigation of some sort. This is needed to verify the policyholder’s death and also to ensure there was no fraud involved. The investigation could take a couple of days, weeks, or sometimes even longer. It will depend on the individual circumstances. After the investigation is complete, an agent most likely will meet with you in order to complete paperwork needed to disburse the benefit.
4. Arrange the Payout
The most typical outcome for a life insurance claim is for the beneficiary/beneficiaries to receive a lump sum, one time payment. There could be, however, cases where an insurer may offer an option for specific income. This option will provide with the same death benefit amount on a yearly basis for a specified time until the benefit has been paid in full. You can also name your own second beneficiary who will receive the payments in the event you should die before all the payments are made.
5. Be sure to use the proceeds wisely
The first inclination that many life insurance beneficiaries have is wanting to spend money they receive on some form of impulse spending such as a car or vacation. However, before spending any of the death benefit, you need to ensure that all the deceased’s debts are paid in full. In addition, you will need to make sure all of the burial and funeral expenses are taken care of. You need to take care of these expenses first to ensure that you will not be held accountable for any of the deceased’s expenses that were incurred before they passed away.
