Filing a Life Insurance Claim: A Step-by-Step Guide

Last Updated on July 16, 2024

If you’re named as the beneficiary of the life insurance policy of a loved one who has just passed away, you need to file for a claim in order to obtain the death benefit. Figuring out how insurance claims work might not be the first thing on your mind at a time when you’ve just lost your loved one. This is why we’ve collected all the information you need about the claim filing process to make it easier for you.

As you’re well aware, being the beneficiary of the policy means you’ll ultimately be the person who’ll receive the proceeds of the policy.  In this article, we’ll share some steps you’ll want to take, when the time comes to file a life insurance claim.

How to file a life insurance claim – the steps

The process for filing a claim for a life insurance policy isn’t the same as filing a claim for auto or home insurance. You will be required to validate not only the death of the policyholder, but also verify that you are the legal beneficiary to the insurance.  It’s common for some companies to request a copy of a driver’s license from the beneficiary, or some other form of identity when you start the claim process.

It doesn’t matter if you have whole life, term life insurance, or a non medical exam policy.  The format you’ll want to follow is consistent with all policies.  While the claim filing process may differ from one insurance company to the other, the general steps are as follows:

Obtain a death certificate copy of the policyholder

The first step of the claim process is to obtain a copy of the death certificate of the policyholder from the records office or the funeral home. You could physically pick up the copy or have it mailed to you. It might be a good idea to get help from friends and family for this task as it can get pretty difficult handling all the paperwork that it might involve, especially when you’re grieving from the recent loss.

Get in touch with the insurer

Contact the insurer who issued the life insurance, and notify them about the claim. The insurance company will have their agent explain the specifics of the claim filing process and what steps you can expect. You will have to fill out some paperwork before your claim goes through review.  Generally claim forms can be accessed via the company’s website, or oftentimes they can be emailed.

If there’s a specific agent from the insurance company or an insurance broker that your loved one worked with in the past to obtain life insurance, it might be a good idea to request working with them to make things simpler.  Reach out to the agent immediately, and usually they can help you navigate the death claim process.

Complete the insurance paperwork

Once you’ve notified the insurer of your claim, they will send you the necessary paperwork either by mail or electronically. You’ll typically be required to provide details like your name, social security number, contact information and a copy of your ID such as your driver’s license, in order to verify that you’re the beneficiary.

Along with the paperwork, you’ll also need to send in a copy of the death certificate of the policyholder as well as decide on the method for receiving the payout from the policy.  Luckily, most life insurance companies do not require ‘original’ copies of death certificates of the claim forms.  You can usually fax or email to the insurance company, which will speed up things considerably.

Wait for review and approval

Once you’ve submitted the requisite paperwork, all you’ve to do is simply wait for an approval. Claim approvals typically take 3-4 weeks, sometimes even months, based on the situation. The insurer goes through a review process to check the status of the life insurance policy, validate the death certificate and verify your beneficiary status.

In the event anything is needed, the insurance company will contact you, the beneficiary directly.  We’ve seen some companies actually pay out claims in a matter of days, if all the necessary information is on file.  Again, this will vary from company to company.

How you can receive the death benefit from an insurance claim

It’s up to you to decide how to receive the death benefit you’re entitled to as a beneficiary of a life insurance policy. Here are some of the options:

Lump sum

You can choose to be paid all of the death benefit in one shot or in lump sum. You’ll typically receive the entire amount in a single check, which you can use for covering funeral expenses or in order to settle outstanding debts, if any.  As an example, maybe you acquired a burial insurance policy, to cover final expenses.  You’d definitely wish for the full death benefit to be paid, so you could address these types of needs.

Installments

You can also choose to be paid in installments or in parts over a time period. Insurers can hold and invest the death benefit and you can request to be paid fractions of the sum as well as the interest it gathers, as per your need.  You are not mandated to receive the benefit via this method, but this option could be utilized.

Can your life insurance claim be rejected?

Losing a loved one and dealing with their loss can be heartbreaking. But having a claim denied on top of that can add a lot of financial burden to make things worse. When a claim is denied, the insurer may typically pay you an amount equal to the paid premiums, but hold back the death benefit.

While it’s uncommon, there can be several circumstances under which the insurer may deny your life insurance claim.  Let us be clear, nearly all types of deaths are acceptable and covered by a life insurance policy.  But like most things in life, there are some exceptions.

Contestability

Your life insurance claim can be denied if the death of the policyholder occurs during the contestability period. This is typically about 2 years from the time of the policy purchase, during which the insurer verifies the policy application to check for any false information.

Many applicants provide false information on their application in order to get approved. Most lie about their age, lifestyle choices or existing health conditions. Most also refrain from disclosing smoking habits or dangerous hobbies like racing or scuba diving.

Even if the policyholder’s death during the contestability period is completely unrelated to the false information provided by them in their application, your claim could be denied on the grounds of contestability.

Missed premium payments

In order for your insurance claim to be valid, the policy needs to be active and for a life insurance policy to be active, the policyholder needs to make regular premium payments as per the established schedule. If your loved one failed to make payments, some of the policy benefits, especially the death benefit cannot be claimed.

Cause of death

Life insurance does not cover death under certain circumstances such as suicide in the first two years of the policy. Also, if the death is the result of a homicide, the beneficiary will be required to clear themselves of any wrongdoing in order to claim the death benefit. Events like this are rare, so don’t let this scare you.

Key Takeaways

• The process of filing for a life insurance claim is usually quite simple, although it can often require a good deal of paperwork.
• If your life insurance claim is approved and you’ve been verified as eligible for the death benefit, you can choose the method of receiving the money.
• While it’s uncommon, there is a chance that your life insurance claim may be rejected under certain circumstances.

To Conclude

Figuring out the process of filing a life insurance claim is probably the least thing on your mind when you’ve lost a loved one. However, it might be crucial if you’re financially dependent on it to pay for outstanding debt, cover funeral costs or even support your day to day expenses.

It’s always a good idea to get the help of a family member or a friend in order to get together all the required paperwork and to get in touch with the insurance company to start the claim process. If approved, you’ll likely receive the death benefit within a few weeks or months to support your finances.  Don’t be afraid to follow up on your claim when you file.  Many times by following up and being proactive, you can expedite the process of receiving the death benefit.

Obtaining a life insurance policy is an extremely important matter for most people.  But knowing how to properly file a death claim is equally as important.  Being prepared for what’s required will help a difficult time of losing someone a little less tough.