When you have to make life insurance policy claims, you’re in a really tough situation. This can be especially difficult if you aren’t used to dealing with financial matters and you are the life insurance beneficiary. This may sound chauvinistic, and it is changing. But often women have trouble during this period. You’re in mourning and the last thing you want to deal with is a cold impersonal life insurance company. And you never quite know when it’s appropriate to start looking into your claims.
Last, how can you really ever be prepared for the death of a spouse? Here’s how you can handle this if you are ever in this situation. The first thing to do is call your insurance agent. Ask him or her what documents they’ll need to make a claim. The sooner you call your agent, the better off you’ll be and it will be one less thing for you to worry about. If the deceased person had a policy through work, call the human resources department to get the ball rolling.
You might find it difficult to know what kind of insurance the person who passed away had. Look for old statements or checks made out to insurance companies. Then call those companies and provide the deceased’s Social Security number and they’ll find the policy. As a last resort, call the state insurance department. They may be able to help you. Obviously, you’re going to need copies of the death certificate – usually certified copies. You’ll need proof of your own ID as well. With these documents in hand, the rest is very simple.
The insurance company will give you “proof of death” forms and perhaps some IRS documents too. Once you’ve submitted those forms, you’ll probably get your check within 10 days. It’s pretty quick. The insurance company will then offer you a full payout or payments over time. In most cases you’re better off with the lump sum but you might consider taking the payments. Either way the money is tax-free. Also, if the policy was set up correctly, you won’t have to worry about the funds going through probate.
If the claim is denied, don’t get excited. It’s probably just a paperwork issue. Make sure to record the names and phone numbers of everyone you speak with. Make sure you ask why the claim is being denied and don’t stop asking questions until you understand what they are talking about. In most cases, you’ll have a defined period during which you have to file your appeal.
Remember, the squeaky wheel gets the grease, so make sure to follow up and see how your case is being reviewed. If the insurance company doesn’t pay your claim, you can always take them to federal court. The vast majority of claims that are rejected by insurance companies are done so because (the company claims) the insured misrepresented something or didn’t disclose something (like a preexisting condition). In some cases they will argue that the cause of death was self-inflicted because of something the deceased did.
Insurance companies aren’t in the business of handing out checks, but they can’t afford to get a name for not paying claims either. Make a stink. Be loud and make noise. Threaten to sue and make good on your promises. While most insurance companies do pay claims, just remember that you don’t have to accept it if they don’t. Have you had any experience claiming a life insurance benefit? What was it like?