Filing a Life Insurance Claim
When there is a death in the family, life insurance can provide cash to meet pressing needs. To receive the benefits that you are entitled to, you first must file a claim. To help guide you through that process follow these steps:
Obtain several copies of the death certificate. While a death certificate is the standard form of documentation required when filing a life insurance claim there may be acceptable alternatives in extraordinary circumstances. Your life insurance representative will know what forms and documents are needed to proceed with your claim.
Contact your insurance agent. The life insurance agent who sold the policy can help you fill out the necessary forms and act as an intermediary with the insurance company. If you do not have an insurance agent, or do not know the name of your loved one's agent, contact the life insurance company directly.
As a precaution, you shouldn't store a life insurance policy--which contains important contact and policy information--in a safety deposit box. In most states, boxes are sealed temporarily upon one's death, which could delay a settlement.
In the case of a group life insurance policy, such as one offered by an employer, first contact the group plan sponsor or the human resources department at the employer directly. If you're unable to contact the employer, you may contact the life insurance company directly.
Submit a certified copy of the death certificate (or acceptable alternative in extraordinary circumstances) from the funeral director with the policy claim. Once the claim is submitted, a settlement should be issued to you shortly.
Once a life insurance claim is submitted, you will need to determine how the proceeds will be distributed. Some settlement options that may be available to you are:
- Lump sum: You receive the entire death benefit in a single amount, which allows you to use what you need for immediate expenses and invest the rest.
- Specific income provision: The life insurance company pays you both principal and interest on a predetermined schedule.
- Life income option: You receive a guaranteed income for life. The amount of income depends on the death benefit specified in the life insurance policy, your gender, and your age at the time of the insured's death.
- Interest income option: The company holds onto the proceeds and pays you interest. The death benefit remains intact and goes to a secondary beneficiary upon your death.
Source: American Council of Life Insurers
Locating a Lost Life Insurance Policy
If a family member dies and you are unable to locate his or her life insurance policies, there is, unfortunately, no national or statewide database of all life insurance policies that you can consult. However, you can try to determine:
- which insurance company might have issued the policy
- which agent or broker might have sold or serviced the policy
- whether the deceased might have had insurance through an employer, union or trade association, or other group to which he/she belonged.
Here are some strategies that might turn up useful information:
Look for insurance-related documents.
Search through files, bank safe deposit boxes, and other storage places to see if there are any insurance-related documents. Also, look through address books to see if the names of any insurance agents or companies are listed. An agent or company who sold the deceased their auto or home insurance may know about the existence of a life insurance policy.
Contact current and prior financial advisors.
Contact current or prior attorneys, accountants, investment advisors, bankers, business insurance agents/brokers and others who might have known about the deceased’s life insurance.
Review life insurance applications.
The application for each policy is attached to that policy. So if you can find any of the deceased’s life insurance policies, look at the applications for them. The application will have a list of all other life insurance policies owned at the time of the application.
Contact previous employers.
Former employers may have a record of a past group policy or policies.
Check bank books and canceled checks.
See if any checks have been made out to life insurance companies over the years.
Check the mail for a year following the death of the policyholder.
Look for premium notices or dividend notices. If a policy has been paid up, there will no notice of premium payments due. However, the company may still send an annual notice regarding the status of the policy or it may pay or send notice of a dividend.
Review the deceased’s income tax returns for the past two years.
Look for interest income from and interest expenses paid to life insurance companies. Life insurance companies pay interest on accumulations on permanent policies and charge interest on policy loans.
Check with the state's unclaimed property office.
If a life insurance company knows that an insured client has died but can’t find the beneficiary, it must turn the death benefit over to the state in which the policy was bought as “unclaimed property.” If you know (or can guess) where the policy was bought, you can contact the state comptroller’s department to see if it has any unclaimed money from life insurance policies belonging to the deceased.
Contact a private service that will search for “lost life insurance.”
Several private companies will, for a fee, contact insurance companies for you to find out if the deceased was insured. This service is often provided through their Web sites.
Do you think the life insurance might have been bought in Canada?
If so, you might contact the Canadian Life and Health Insurance Association (phone: 1-800-268-8099; Web site: www.clhia.ca).
Try the MIB database.
There is a database of all applications for individual life insurance that were processed during the last 12 years. There is a $75 charge per search. Many searches are not successful: a random sample of searches found only 1 match in every 4 tries. For information, click here.
Source: Insurance Information Institute