When the unspeakable happens, life insurance can help a family when they need it most, but how does a beneficiary receive the death benefit after the loss of a loved one? Knowing how to request life insurance benefits during such a difficult time can feel overwhelming and stressful, but fortunately, the process is pretty straightforward. Since a policy’s death benefit is not paid out automatically, a beneficiary must file a death claim to receive the payout. Here’s what to know about life insurance claims and what you can do to help ensure a smooth process.
When you purchase a life insurance policy, part of the process is designating one or more beneficiaries. Choosing a beneficiary is an important decision, as this will be the person or organization that will file a claim and receive the death benefit if you pass away. If you have multiple primary beneficiaries, the payout will be distributed equally or based upon a percentage that you determined when you purchased the policy.
Depending on the insurance company, filing a claim can be completed online or through a paper claims process, and they will often provide useful resources and a claim packet to guide you through each step. Here’s an overview of the basic steps of filing a claim:
If you need assistance, the insurance company or a financial professional can help explain the claim process and what is required. If you have a copy of the life insurance policy, check the company name and/or agent listed on the paperwork.
Most insurance companies require an original certified death certificate issued by the state in which the deceased passed away, with the cause and manner of death listed. You must obtain a certified copy of the certificate, not a photocopy. The funeral director handling the final arrangements can usually help you in getting the copies that you need.
Each beneficiary must complete and submit a signed claimant’s statement, which is typically included in the claims packet. Most forms ask for the policy number, basic information about the deceased, the claimant’s information, and settlement options, which is how a beneficiary wishes to receive the payout.
Depending on the policy and named beneficiaries, other forms or documents may be required. Speaking to an agent or the Claims Department at the insurance company can help determine if additional information is required to complete the claims process.
Part of completing the claimant’s statement is choosing how you wish to receive the life insurance payout, which commonly includes a lump sum paid all at once or installments paid over time. Lump sum payments give instant access to the life insurance benefit in the form of a check or bank deposit, while installments spread payments out over time. Sometimes you can also choose an interest option where the death benefit is left on deposit to accrue interest, or a life income option where the insurance payout is converted to an annuity and you receive guaranteed payments for the rest of your life.
Once you submit a claim, payouts are usually processed within two weeks after receiving the paperwork but can take up to 60 days. Missing paperwork or information on the claim form can slow the process, so be sure you have reviewed everything carefully before submitting it. After the claim is submitted, the insurer will review the claim form, death certificate, and any additional documentation. You will likely hear from the insurance company if further information is needed or if there is an issue with your claim. A few factors that can influence when life insurance benefits are paid include:
Each company has different rules, so review the claims packet carefully or speak to the insurer directly if you have any questions. You can often check the status of your claim online or by calling the company. Many insurance companies know it’s a very difficult time and want to make the claims process as smooth and simple as possible.
In most cases, life insurance benefits are paid out in a timely manner, as long as all steps are followed and necessary documentation is provided. If a claim is denied, the insured may have stopped paying their premiums and coverage had ended, false information was provided on the original application, or the cause of death did not fall within the rules of the policy. If for any reason you receive a letter indicating that the claim has been denied, you can contact the insurer to receive further information and next steps.
When you complete the claims packet and mail an original copy of a certified death certificate to the insurance company, the claim process will be set in motion. The best thing you can do to help the process go smoothly is to ensure all necessary information and documentation are provided. If you find yourself needing to file a claim then you are likely experiencing an extremely difficult time. Remember that as a beneficiary of a life insurance policy, you have a person in your life who wanted to leave behind a positive and lasting impression.
To report a death and file a claim with the North American Company, visit the Life Claims Forms page or call toll-free at 877-880-6367.