How To File a Life Insurance Claim (2024) (2024)

The potential to receive a death benefit payout for their loved ones is why people take out life insurance policies. If you’re involved in a life insurance claim, you want to fully understand the process and ways to avoid delays to ensure you get the payout you’re entitled to.

In most cases, the process is simple. As an executor or beneficiary of a life insurance policy, you can take steps to expedite things by submitting the right documentation and being responsive if insurers have questions about your claim.

Here are the steps you will follow when submitting an initial death benefit claim:

Determine Which Life Insurance Company Holds the Policy

When someone dies, it is possible they had multiple policies in effect. Your first order of business is to identify which life insurance coverage is still in force for a payout and identify the insurer you’ll file a claim with. If you suspect a person had life insurance in effect when they passed but can’t find records, check the person’s bank accounts and canceled checks to see if there are payments to one or more life insurance companies.

Go back for at least a year or longer since many premiums are paid annually. Also, go through safe deposit boxes, check with employers for group life insurance policy coverage and check income tax records, which could indicate dividend income from a life insurance policy.

You can also check with your state’s Department of Insurance and see if they have a database or use the National Association of Insurance Commissioners’ Life Insurance Policy Locator Service. Insurers in many states must now check their policyholder lists against the Social Security Administration’s “Death Master File,” which catalogs U.S. residents who have died. It will be the insurance company’s best source to find the beneficiaries.

Obtain the Death Certificate

A death certificate is required to file a life insurance claim. You can usually get a certified death certificate from a local health department or get help from a funeral home on what steps to take. Be sure to get multiple copies of a death certificate, because you may need to submit a certified proof of death to several places as part of the estate disposition process.

Life insurance companies usually want a certified copy of the death certificate and not a copy.

File the Death Benefit Claim With the Life Insurance Company

You can often start a claim online, depending on the insurance provider. If not, contact the company directly and ask for the claims department. They’ll walk you through the process and answer your questions. In addition to a death certificate, you’ll need the insured’s policy number, date of birth, full name, date of death, the place they died, cause of death and your name as the beneficiary.

That will start the insurer’s internal review process.

Choose the Form of the Payout

This will happen as part of the submission process, and you can receive a life insurance death benefit payout in several ways.

• A lump sum. A lump sum option gives you and other beneficiaries the whole amount all at once.
• Specific income. You can have the insurer pay you the death benefit on a schedule over a certain period. Any interest earned would be taxable.
• Life income. The life income option gives you income for life, but the amount varies by the death benefit and beneficiary’s age and gender.
• Interest income. You are only paid interest on a policy but not the death benefit. The death benefit goes to a different beneficiary when you die.

After you submit the paperwork, you could be paid in a week or less. Assuming everything is in order, you should receive the money within 30 days at the latest. However, there are times when delays or denials occur.

Overcoming Challenges and Claim Denials

Not all claims go through a smooth review process. Several challenges can crop up that you’ll need to address before a payment might be issued. Even then, there are times when you will be denied with no hope of a payout.

Insurance Fraud

If your initial claim submission is rejected or delayed, it may be due to the buyer not providing accurate information on the policy, such as lying about current medical conditions or their medical history.

Contestability Periods

Some life insurance policies have contestability periods, especially those with a no-medical-exam provision. This period can be a two or three-year window after a policy is purchased when the company may contest a claim.

Another reason a policy might be denied is when a policyholder commits suicide. This often voids the policy within the contestability period, typically within the first two years after the purchase. Also, if a person died while committing a felony, a felony exclusion could keep beneficiaries from receiving the payout.

Policy Lapse

Some policyholders also stop paying premiums, which can cause a policy lapse, meaning the holder is not covered. Some whole life insurance policies have a paid-up provision from the built-up cash value that makes premium payments under some conditions.

Change of Beneficiaries

Another problem may be due the policy owner changing beneficiaries and not telling anyone. The policyholder may have changed their mind or decided to put the proceeds into a trust, particularly if there are multiple beneficiaries. If you’re not a beneficiary, finding out who is after an insured’s death benefit requires legal action. Life insurance companies do not disclose this information to people who aren’t parties to the life insurance contract.

What To Do If Your Claim Is Denied

If a life insurance claim is denied, ask for the reason for the denial in writing. It may be possible to appeal the decision by gathering the necessary documents and information to support the claim. If you can’t resolve the dispute with the insurer, contact a life insurance attorney or your state’s Department of Insurance for guidance.

Beneficiaries are responsible for providing accurate information to insurers when they file a claim. Knowingly submitting false or inaccurate information is fraud and could lead to a claim denial. In some cases, it could also lead to criminal prosecution.

Beneficiaries also have several legal rights, including:

The right to know the policy amount. A policyholder doesn’t always share this information with beneficiaries when they are alive, but you have a right to get that information from the insurance company.

The right to know how to file a claim. Insurers must provide you with clear and concise steps on how to complete a death benefit claim successfully. The insurance company must inform the insured of how long it will take to make a determination.

The right to know why the claim is denied or delayed. It should not take more than 30 days to process a claim. If there is a delay or the claim is denied, beneficiaries have a right to know why.

The right to examine the documents used in reviewing the claim. Beneficiaries have the right to examine the documents the insurance company used in denying the claim. Otherwise, they won’t know if they have good legal standing for an appeal.

The right to know how to file an appeal. It is important to know the deadline for filing an appeal and where to send it.

To ensure a smooth and quick death benefit claim process, make sure you understand the steps and documentation you’ll need to provide when filing a claim. Also, understand your rights as a beneficiary and be sure to ask questions if you’re not sure how something should be handled, including if your claim is delayed or denied.

The vast majority of claims are handled smoothly and professionally by insurers. You can do your part as well to ensure the payout process is handled promptly.

Methodology: Our System for Ranking Life Insurance Companies

Our team researches and ranks life insurance companies using an in-depth scoring system that considers the factors most important to consumers like you. Our analysis includes a comprehensive review of each provider we feature based on available coverage, customizability, availability, customer service and company reputation. Here are the factors we take into consideration when rating life insurance providers:

• Brand trust (40%): Life insurance payouts can exceed $100,000 or more, which makes choosing a reputable and trustworthy insurance provider important. To assess brand trust, we use J.D. Power and Associates customer satisfaction surveys, AM Best credit rating scores and the National Association of Insurance Commissioners (NAIC) complaint index. The higher a company scores in each area, the more points it receives.
• Coverage (33%): The more policy options a life insurance company offers, the more opportunities you have to obtain the right coverage for your specific needs. For this reason, we give companies the most points for offering multiple types of life insurance, including various term, permanent and no-exam options.
• Availability and ease of use (19%): Since life insurance coverage options can be complex, we consider the ways a customer can reach a company — and how easy communication is. For this category, we research how many communication channels a company offers for general customer support, claims processing and the application process. Companies earn the most points for offering various ways to interact with an agent, both in-person and online.
• Riders (8%): Companies offering various life insurance riders or endorsem*nts allow policyholders to better customize their coverage. In this category, we determine how many riders a company offers and award the most points to providers with more than 10 options.

We use our rating system to compare and contrast each company against key factors to help us determine the best life insurance companies in the industry. To learn more, read ourfull life insurance methodologyfor reviewing and scoring providers.AM Best Disclaimer