After losing a loved one, there’s so much going on, that it’s easy for things to seem overwhelming. When you’re collecting life insurance benefits for the first time, it’s possible that you may have questions.

• Where do I start?
• What information do I need to collect life insurance benefits?
• How do my life insurance benefits actually pay out?
• How long will the life insurance claims process take?
• Can my life insurance claim be delayed or denied?
• What happens if the beneficiary has passed away?

Here’s a helpful guide that will answer all of your questions:

Where to start:

How do I contact the life insurance company to file a claim?

The first thing you need to find before you can file a claim is a contact at the insurance company. Here are some of your options:

• Contact the insured’s agent directly.
• If you can’t do that, try either the customer service or direct claims line.
• These numbers are listed on either the policy itself or the insurance company’s website.

This part can be more difficult if you don’t know whether the deceased had a policy. Fortunately, here’s a handy guide for how to find out if a life insurance policy exists.

How do I obtain the death certificate?

The death certificate is generally something that is prepared through the funeral home, so they should be your primary contact. But the specifics of the process differ based on the state. Check out this handy guide to figure out what your state requires.

Actually receiving the death certificate can actually be one of the most time consuming parts of the claims process. It generally takes 10-12 days, but can take as long as 6 weeks before you ever actually get it. Thankfully, once you have it in hand, you’re almost ready to start the claims process.

What information do you need to collect life insurance benefits?

There are three key pieces of information you need to have together before you reach out to the insurance company. They are as follows:

1. Death Certificate:

   To receive death benefits, you need to prove that the deceased is actually dead. While it may sound ghoulish to some, this helps combat against insurance fraud. It is also the most important piece of information here. For this reason, it’s recommended that you have multiple copies, at least 10. It will cost you a bit extra, but they will be worth having if something goes wrong.

2. Social Security Number:

   Another piece of fraud protection when receiving these benefits is having the deceased’s social security number handy.

3. Policy Number

   The deceased’s policy number, if you have it, is also another handy piece of information to have to make the claims process run smoothly.

4. Proof of Beneficiary Status

   If you’re collecting the benefits, you’ll also need to prove you’re the listed beneficiary. This will just require a few extra pieces of information. Here’s the information you’ll want to have:

   • The documents listing your beneficiary status
   • Your social security number
   • Your tax return

Once you have all of this information together, then you’re finally ready to file a claim.

How do life insurance benefits actually pay out?

Once you’ve finally made your way through the process of filing your claim, and you get approved, then you come to the question of how your benefit will actually pay out. While there are many variations on them, here are some of the ways benefits can pay out:

• Lump sum:

  The default option for most policies, this is when benefits can be paid out all at once for the beneficiary. Choosing a lump sum can also make your benefit pay out a bit quicker, generally receiving payment in two weeks at the latest as long as there aren’t any problems.

• Specific income provision:

  This where the insurance company pays you the policy’s  principal and interest on a set schedule.

• Life income option:

  The insurance company uses your benefit to pay you a guaranteed income for life. Though, the amount depends on a number of factors including:

  • Benefit value
  • Beneficiary’s gender
  • Beneficiary’s age at time of insured’s death

• Interest income option:

  The beneficiary receives the interest gained on their benefit, while the insurance company holds onto the principal benefit. This principal can then go to a second beneficiary after the first passes away.

No matter which way you choose to collect your benefits, most insurers will pay with either an official bank check or electronic fund transfer.

It’s also worth noting these payouts are generally not taxable, outside of some very specific situations.

How long does the process of collecting life insurance benefits take?

In most cases, life insurance benefits will pay out in 10-14 days. If you’ve chosen a lump sum option, you’ll receive the full payout. If you’ve chosen an installment option, you’ll receive the first installment. This is especially true if the policy has been in force for at least two years.

If the insured dies before within two years, falling within the contestability period, the wait could be longer, anywhere from 30-60 days. This extra time allows the insurer to conduct an investigation if they suspect fraud or something that violated the insurance contract.

Thankfully, the insurance company has a deadline to hit as well. Depending on the state, the insurer has 30-45 days after the claim is filed to pay the beneficiary their first installment. If they miss that, then insureds are actually entitled to “statutory interest” based on the amount of total death benefit.

Why is my life insurance claim being delayed or denied?

As noted before, it’s possible you won’t run into any issues collecting the benefits on a life insurance claim. But sometimes, even when you have all the right information handy, you run the risk of having your claim delayed or even denied. In many cases, these delays arise in situations where insurers suspect fraud.

Here are some situations that raise red flags for insurers:

• If an insured passes away within the policy’s contestability period.
• This is a period every life insurance policy carries and generally lasts for two years, though it varies by state.
• If an insured dies from homicide.

In these situations, the insurer has the right to investigate the claim and see if it violates any provisions in the policy. For example, the following causes of death can result in a claim being denied:

• Suicide within the policy’s contestability period.
• A risky hobby not otherwise listed on their application.
• Illegal activities, such as drunk driving.

If the insured’s death is an accident, then the beneficiary will have to speak directly with an insurance underwriter. What’s important to note is that these underwriters are often looking for any way not to pay out a claim. They’ll be looking back through years, even decades worth of history about the insured, trying to find any discrepancies. These investigations often include looking at an insured’s:

• Autopsy reports
• Medical records
• Toxicology reports

If you find yourself in this situation, it’s best to seek out legal help. They can help keep you from possibly losing out on any benefits. While you’re doing that, here’s a handy guide on how to deal with underwriters looking to deny your claim.

These exclusions are just the tip of the iceberg. So, it’s important to be aware of them before you enter the claims process to collect your benefit.

What happens if the beneficiary of a life insurance policy passes away?

It’s possible you’ll find yourself in a situation where the original beneficiary on a policy has passed away. Especially if this on a policy that was otherwise lost. Here are a few situations for you to consider:

• If a beneficiary has passed away, the insurance company will investigate and see if there are any primary co-beneficiaries. In this case, the remaining primary beneficiaries will receive the benefits.
• If all of the primary beneficiaries have passed away, then the benefits will go to any secondary or contingent beneficiaries.
• In the event all possible beneficiaries have passed away, then the benefits become part of the insured’s estate. And if there isn’t a provision in the insured’s will for how to distribute these benefits, then the benefits will go into probate. From there a court will decide what happens with the policy.

While this can be a time consuming, and even tedious process, its good to have a sense of what you’re getting into. The specifics of going into probate may vary by state, so you should seek out legal counsel to find the best solution for your situation.

Final Considerations

What’s worth noting is that delays and complications with benefit payouts account for a large majority of complaints for insurance companies. So, perhaps that is something to consider when choosing your provider.

It pays to be specific about your wishes and to make sure your beneficiaries are aware of your policy as well. That way the benefits won’t get lost in the shuffle when your beneficiary needs them the most.

If you’d like to compare rates for the providers that best fit your lifestyle, True Blue Life Insurance is here to help! Our quote engine and questionnaire will help you find the best quote and the best provider for your lifestyle.

• About the Author

About Max Havey

Max Havey is a Senior Content Editor for
True Blue Life Insurance. With experience in the realm of journalism, content writing, and ghostwriting, Max is bringing his expertise to True Blue’s website and wider content initiatives.

He received both his Bachelor of Journalism and Master of Arts with a focus in journalism from the University of Missouri-Columbia in 2015 and 2017, respectively.

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