Filing A Claim: Navigating The Life Insurance Maze

Filing a claim against life insurance is a relatively straightforward process, but it can be made difficult if you are grieving or unfamiliar with the process. The first step is to contact the insurance company or agent, who will explain their specific process for filing a claim. You will then need to obtain several copies of the death certificate, before filling out the necessary forms and sending them in. You will also need to specify how you want to be paid.

Contact the insurance company or agent

Contacting the insurance company or agent is the first step in filing a life insurance claim. This is what you need to know:

Identify the Insurance Company or Agent

The name of the insurance company will be clearly stated in large letters on the life insurance policy. If you can remember the agent you worked with, ask for them specifically. If you don't have the policy to hand, you can try contacting the policyholder's financial advisor or estate planning attorney, who may have this information.

Once you have the correct contact details, get in touch with the insurance company or agent. They will explain their process for filing a claim and direct you to their claim form. They may offer the option to file online, or you may need to fill out the form in person.

Complete the Claim Form

The claim form will ask for basic details, such as your full name, address, date of birth, and Social Security number. You will also need to explain your relationship to the policyholder. The insurance company or agent will let you know what other information and documents you need to provide.

Submit the Claim Form

After completing the form, submit it to the insurance company or agent, along with any required supporting documents. These typically include a certified copy of the death certificate, which you can obtain from the funeral director or local vital records office. It is recommended to get multiple copies of the death certificate, as you may need them for other purposes, such as closing accounts or contacting utility companies.

Choose Your Payout Method

Insurers offer several payout methods, and you will need to decide how you would like to receive the money. You can usually choose between receiving the payout as a lump sum or in installments over time. Each method has different tax implications, so it is advisable to speak with a tax professional if you are unsure.

Follow Up

Communicate with the insurer throughout the process to ensure a smooth transaction. Depending on your state's regulations, an insurance company may have up to 30 days to review and accept or reject your claim. However, in most cases, companies will pay out a life insurance claim within a week or two after receiving the paperwork. If there are delays, don't hesitate to contact the insurer to find out why.

Get copies of the death certificate

When filing a life insurance claim, you will need to get copies of the death certificate. This is a formal record of the date and location of a person's death. The funeral director usually purchases several copies for your use. However, it is important to get certified copies, as some institutions will not accept photocopies. Certified death certificates have security features that prove the document is genuine, such as a watermark, a raised seal, micro-printing, or heat-sensitive ink.

You can get a certified copy of the death certificate from the relevant local government agency, such as your local vital records office. If the person died in New York City, you can order a certified copy online or by mail from the Office of Vital Records. If the person died outside of New York City but in New York State, you can order a copy from the New York State Department of Health. If the person died outside of New York State, contact the vital records or death records office of the relevant state. If the person was a U.S. citizen and died outside of the United States, contact the U.S. Department of State for a Consular Report of Death of a U.S. Citizen Abroad.

It is recommended to get multiple certified copies of the death certificate, as you will need to provide one to the insurer and may need additional copies for other institutions, such as banks or government bodies. It is suggested that you obtain at least 10 certified copies, as you may also need them to cancel subscriptions, close accounts, access financial accounts, file income taxes, and contact utility companies.

Fill out the claim form

Once you have the name of the insurance company and the policy number, it's time to fill out the claim form. This is a crucial step in the process of filing a life insurance claim. Here are some detailed instructions to guide you through the completion of the claim form:

• Contact the insurance company: Get in touch with the insurance company or agent to understand their specific process for filing a claim. They will be able to guide you through the steps and provide you with the necessary forms or direct you to their online platform.
• Gather required documentation: Before filling out the claim form, make sure you have all the necessary documents. This includes personal details about yourself and the deceased, as well as the death certificate. You may also need the insured's date of birth, date and cause of death, state of residence, and Social Security number.
• Complete the claim form: Fill out the claim form as accurately and honestly as possible. Provide all the requested information, including your full name, address, date of birth, and Social Security number. Clearly explain your relationship to the policyholder.
• Indicate your preferred payout method: When filling out the claim form, you will likely be asked to choose how you would like to receive the payout. You may have options such as a lump sum, life income annuity, specific income annuity, or retained asset account. Consider the financial implications of each option and consult a financial advisor if needed.
• Double-check your answers: Before submitting the claim form, take the time to review your answers carefully. Ensure that all the information provided is accurate and complete. This will help prevent delays in the claims process due to errors or missing information.
• Submit the claim form: Once you have completed and double-checked the claim form, submit it to the insurance company along with the required documentation. You can send it through mail, online, or in person, depending on the insurer's preferences and your chosen method.

Remember to be thorough and honest when filling out the claim form. This will help ensure a smoother claims process and avoid any unnecessary delays. Each insurance company may have slightly different procedures, so be sure to follow their specific instructions and reach out to them if you have any questions or concerns.

Specify how you want to be paid

When filing a claim against life insurance, you will need to specify how you want to be paid. There are two main ways to receive the life insurance death benefit:

Lump Sum

You can request a check with the full amount. The insurer may also offer you a draft account, known as a "retained asset account". This is similar to a checking account, allowing you to withdraw money at any time and in any amount until the account is cleared. Generally, life insurance payouts are not taxable income.

Installments Over Time

The insurer will hold the money and may offer you some of the following choices, with details varying by company:

• Interest payments: The insurer pays you regular interest on the balance. The principal may then go to your estate upon your death. Check the insurer’s rules to find out if you also have the option to withdraw from the principal.
• Fixed period: The insurer makes regular payments on the principal and interest for a designated period of time.
• Fixed amount: The insurer pays a defined amount at regular intervals until the payout and interest are exhausted.
• Life income: The payout gets converted into an annuity that provides regular payments for the rest of your life.

Each of these methods may have tax consequences, so it is recommended to speak with a tax professional if you’re unsure which to select.

Submit the claim form

To submit the claim form, you will need to contact the insurance company or agent. They will be able to explain their process for filing a claim and provide you with the necessary forms. You can also ask for the agent you worked with, if you remember them. The name of the insurance company will be clearly stated in large letters on the life insurance policy.

Most insurance companies make their forms available online. If this is not an option, you can call the insurance company or agent to find out the next steps. They will probably ask you to send the death certificate by mail with the paperwork.

The claim form will ask for basic details, such as your full name, address, date of birth, and Social Security number. You will also need to explain your relationship to the policyholder and how you would like to be paid. It is important to fill out the paperwork as fully and honestly as possible.

Frequently asked questions