Because the necessity for filing a life insurance claim means that a loved one has passed away, the process can seem overwhelming and difficult. While this is naturally a very emotional and challenging time, the paperwork process is fairly simple to manage if you have access to the right documents and follow appropriate procedures.
Information Needed for a Life Insurance Claim
When it comes time to file a life insurance claim, you'll need to obtain certain documents to get the claims process initiated. Keep in mind that insurance companies may differ slightly in their procedures and requirements. It's always best to check your policy and/or contact the issuing carrier to verify exactly what their requirements are. At a minimum, you can expect to need:
- Life insurance policy: It will be helpful to have access to a copy of the life insurance policy on hand when you begin filing your claim. You will need to provide information from the document, and the insurer may ask you to submit a copy of the policy with your claim. For this reason, it's important to keep copies of important documents, such as life insurance policies for which you are a beneficiary, in an accessible place. If the policy is in the insured's safe deposit box, you won't be able to access the box until after probate is concluded unless you are a signer on the box.
- Death certificate: You'll need to send an original official death certificate with your claim. After a loved one dies, you'll need multiple copies of the death certificate. You'll be able to order them directly from the company that handles burial or cremation services. If the person died out of the country, you'll need to obtain a Report of the Death of An American Citizen Abroad form, which is issued by the U.S. Department of State.
Each carrier may want additional information. For example, AIG Insurance requests a newspaper account of the death (if available) in addition to a copy of the policy and the death certificate.
Filing the Claim
The process for filing the claim is pretty straightforward in most cases. There is not a lot to do unless the insurance company has questions or needs to investigate further. The basic steps to filing a claim are:
- Depending on your policy, you'll need to either call the company directly, contact the agent who sold you the policy, or initiate your claim online via the insurance company's website. Look at your policy, which should provide instructions on who to contact in the event of a claim.
- State Farm starts by asking who is making the claim and what relation the person is to the deceased. They also want to know whether you're the executor, trustee, or beneficiary. Then, you will need to provide your contact information, the policy information, additional information surrounding the decedent's death. From there, you'll be taken to a review screen where you can submit a notice of claim. From there, you'll receive directions on submitting the necessary supporting documents.
- If online filing is not available, you'll need to ask to have a claim form sent to you. Some insurance companies will mail a paper form, while others will provide the document by e-mail. Some companies may even have the forms available for download from their website.
- The beneficiary is usually the one who needs to fill out the claim form. Ensure you've answered every question and fill out every box; otherwise, it may delay processing. If there is more than one beneficiary on the policy, each person should submit a separate statement.
- Submit the form(s) with the required documentation, which typically includes at least an original death certificate.
- A representative of the insurance company will provide you with a claim number that you can use to monitor the status of the claim.
- Wait for a response from the insurance company to determine whether they need additional information, have questions, or if the claim is approved or denied.
The timeframe for paying out life insurance claims varies. You could receive the payment in as early as seven days after submitting your claim, or it could take several months depending on the circumstances surrounding the death or the terms of the policy. Depending on the type of policy, there may be financed premiums or loans against the policy that need to be satisfied before the claim is paid.
Once the claim is approved, the insurance company will pay the funds per the terms of the policy. Life insurance payments are typically made in a lump sum amount or as installments paid out over time. The insurance claims rep should know this and be able to inform you of when you can expect to receive payment and how the payment will be made.
Tracking Down Life Insurance Policies
Not everyone is fortunate enough to have access to a deceased loved one's life insurance policy or even know what carrier life insurance was taken out through. If you know a life insurance policy exists, but you cannot find the policy itself, Nerd Wallet has some great information on how to go about trying to track down the information based on what state the covered individual lived in.
Also keep in mind the person may have life insurance policies that you don't know about. There are a number of ways to find out if someone has a life insurance policy. For example, if the deceased was still working at the time of death, he or she made have had life insurance through work in addition to any private policies taken out. Ask a human resources representative at the individual's employer to find out. Additionally, some bank or credit union accounts also include life insurance, so make inquiries about that when making arrangements to close out the person's accounts. Further, if the deceased was a military veteran, there could be an active policy related to his or her military service. There are separate filing instructions on the U.S. Department of Veterans Affairs website based on the policy type.