How can your Family Claim for your Insurance Policy when you die?
When you die, a family member or the direct beneficiary needs to know how to collect the life insurance payments they are entitled to especially if survivors depended on the deceased for financial support.
If you die and your family depends on you financially, falling into financial hardship can make a loss even more difficult. But where do you start if you’re not sure if they had a life insurance policy, and how do you make a claim if they did? Read in the steps to learn the five easy steps your family needs to follow when filing a death claim, what types of roadblocks they can run into, and how to they will be able to confirm you are the rightful beneficiary of a life insurance policy.
Step 1: Let your family member gather the important documents
After your death, it somehow can be difficult to find the energy or focus to do anything, let alone gather up all the paperwork needed for a life insurance claim. But having the documents in order can help make the process easier so your next of kin can get paid sooner.
- Death Certificate – The insurance company will need a certified copy of your death certificate as proof of death that ensures that policies are being claimed legitimately and helps prevent fraud.
- Policy document – Secure a copy of the life insurance policy for your family member in case you die. That way, they will know that you have existing life insurance and keep an eye out for the life insurance provider.
Step 2: Let your family contact the insurance company
Once they have all the required documents, they will need to get in touch with the insurance company that issued your life insurance policy to notify them of the death so that they can pay out the death benefit immediately.
Step 3: Waiting for the processed claim
If you died within the term of their policy, your next of kin or beneficiaries can make a claim with your insurer over the phone or online provided they have the information needed. Your next of kin will need to have some basic details to hand about you, and any details they have about the policy. They will be asked questions regarding your date and cause of death. They usually need to send the insurers an original death certificate.
There is no definite time as to when but once they have agreed to pay the claim, and they have everything they need, the payment can take as little as a week, but it does depend on having the information they need to be able to decide on the claim and few other factors.
Step 4: Receive the death benefit
Depending on your insurer and the plan, there are a few different ways you can choose to receive the death benefit. The two simplest and most popular options are lump sums or annuities.
- Lump-sum- With a lump-sum payment, you’ll get the entire death benefit at once. This means you won’t have to worry about finding other ways to pay for the funeral and so on. Not only will you be able to receive the full death benefit; you also won’t have to pay taxes on it.
- Annuity- This is where the insurance company will pay your family member for a pre-determined number of years.
