The sadness that lingers when someone close dies can overshadow the financial and legal issues facing the survivors. Dealing with the loss of a loved one can be emotionally devastating. As a result, business matters might get pushed to the side during the period of grieving.
As difficult a time as this is, there’s a responsibility to carry out the deceased’s wishes, and that should be taken care of in a timely manner.
If you are the beneficiary of a life insurance policy, here’s what needs to be done — a step-by-step process to guide you through this trying time and help you claim the benefit that has been established for you.
Claiming Life Insurance Benefits
The benefits from a term life insurance policy with living benefits can provide much-needed funds for surviving family members after a death — to help maintain a certain quality of life, to be used to help pay for funeral expenses, or to help settle the deceased’s affairs.
First and foremost, the insurance agency that sold the policy should be contacted to determine who the beneficiary is — or if there’s more than one.
To get information about the deceased’s policy, you must be the beneficiary or the executor of the estate. If the beneficiary is deceased and no secondary beneficiary is listed, the benefit usually goes to the estate to be used as instructed by the will, to the next of kin, or to any creditors who are still owed money.
The claim process with the insurance company should begin as quickly as possible after the death occurs.
To begin the process:
- Let people know. This might seem like a fairly obvious step, but the first thing to do is let people know about the death as soon as possible. Naturally, this includes family, friends, colleagues, and the insurance company where the deceased held a policy. You will need to gather the following documents to collect the benefit.
- Get a copy of the death certificate. You will need to get a certified copy of the original death certificate to present to the insurance company. This document can be obtained from the funeral home, the local Department of Records, or the Vital Statistics Office.
- Get a copy of the insurance policy. Find the deceased’s life insurance policy and send a copy of it to the insurance company. If you can’t find the policy, let the insurance provider know. They will verify the policy, as well as the passing of the insured.
The insurance agency may have you fill out a claim form or additional forms that report the death. In some cases, an insurance adjuster might contact you with a few routine questions. This is merely a safeguard against insurance fraud and should not be considered out of the ordinary.
If you are not certain which insurance company issued the policy, check to see if the deceased left an organized estate. If so, there should be a record of life insurance policies and the names of the agents or agencies to contact. This type of information is usually included in a will or filed with the attorney who drafted the will.
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Understanding the Value of the Policy
Claiming life insurance benefits is not always as cut and dried as it might seem. For instance, after you find out what type of life insurance policy the deceased had (term life insurance, burial insurance, or permanent life insurance), you will need to see what the policy is worth and if any credit or mortgage insurance was attached to it that might reduce the overall amount of the benefit.
Additionally, if the deceased still had a significant amount of debt at the time of his or her death, the beneficiary might be required to use some of the insurance benefits to pay off the outstanding amount. This is typically not the case, but creditor laws vary from state to state, so the possibility will need to be taken into account. To be certain, check with an attorney who is licensed where the insured lived.
Life Insurance: A Smart Investment
A life insurance policy is not only a smart investment. The benefits can also make a world of difference to those who’ve been left behind. Contact True Blue Life Insurance at 1-866-816-2100 to discuss your options for purchasing a life insurance policy that’s right for you.