Filing a Life Insurance Claim
The death of a loved one is usually a very stressful time. The emotional loss combined with the financial loss can leave family members unsure of what to do or where to turn. Hopefully the deceased owned a life insurance policy and left clear and accurate information about that policy and what to do in the event of his/her death. The first thing you will need to do is assess whether there is a life insurance policy, its coverage amounts, and where it can be located.
Easy Steps to Filing a Life Insurance Claim
Once you have determined there is actually a life insurance policy you will need to read through the information and prepare to begin the paperwork associated with filing a claim. You will also need to obtain several copies of the death certificate from the funeral home. Most companies will require a copy of the death certificate and each policy will need a certified copy.
The next step is to determine who is listed as the beneficiary of the policy. Legal rights to the coverage need to be determined before filing the actual claim. Most of the time the spouse will be listed as the beneficiary although in some cases children or parents may be the recipients. If you are unable to locate information on the policy you may need to write to the Missing Policy Service at the American Council of Life Insurance. This information will be sent out to hundreds of insurance companies who should be able to help you with a claim.
Once the policy information and beneficiary is identified the next step is to decide how you want the money paid out. Sometimes the person purchasing the policy will state how the policy should be paid out, but you may also have some different options. You may want a lump sum payment and use the money to pay immediate financial expenses. If there is money left you can determine how to invest the money to earn the best return. Talk to someone you trust to help make the decisions about how to spend the money in the most efficient manner.
You may choose an interest income option. This type of payment will give you the interest earned on the policy until the money runs out. This is a great choice if you do not need the money immediately. The amount of the life insurance policy will continue to earn money and remain a tax free investment for your financial future.
A final type of pay out is a life time income option. This will take into account your age and how much the policy is worth. It will then pay you a set amount for the rest of your life. There will usually be a minimum number of payments in the event you pass away shortly after the beneficiary. In a case like this the remainder of the policy would go to the person named as the secondary beneficiary.
Filing a life insurance claim for a death benefit does not have to be difficult. You will want to begin the process as quickly as possible especially if you will need the money to help pay for funeral expenses and household bills. You may not want to keep the documents in a bank safety deposit box because after a death these can be sealed for a set amount of time. Protecting your family in the event of your death is important. Make it as easy as possible for them to claim your benefits by reviewing your policy often and keeping the claim up to date.
