Life Insurance Claims: Time Limits After Death

Life insurance death benefits can provide much-needed financial support after the death of a loved one. There is no deadline for filing a life insurance death benefit claim, and there is no time limit on receiving life insurance death benefits. However, the sooner you file a claim for a death benefit, the sooner you will receive your money. The payout can be delayed for a variety of reasons, such as if the wrong forms are sent in or if the policy has lapsed. The company may also take longer to investigate the claim in certain situations, for example, if the cause of death is homicide. Once a valid claim has been made, it usually takes about 30 days to receive the payment from the insurance company, although it can sometimes take 60 days.

There is no time limit for claiming life insurance after death

There is no time limit for claiming life insurance after the death of the insured. While there is no deadline for filing a claim, it is still recommended that beneficiaries take a proactive approach and not delay claiming. The earlier a claim is filed, the sooner the payout will be received.

To file a claim, the beneficiary will need to contact the life insurance company. Most companies allow claims to be filed online, while others may require claims to be submitted by mail or phone. The insurance company will then review the claim and the supporting documents, which typically include a copy of the death certificate, the policy contract, and the insured's personal information.

After reviewing the claim, the insurance company will notify the beneficiary of their decision to pay out the claim, ask for additional information, or deny the claim. In most states, insurance companies have 30 calendar days to review a submitted claim. If the claim is approved, the beneficiary will usually receive their payout within 30 to 60 days of filing the claim.

It is important to note that delays in the payout can occur due to various reasons, such as investigations into the cause of death, policy lapses, or incomplete paperwork. Additionally, if the insured's death occurs during the policy's contestability period, the insurance company has the right to review the decedent's medical history and reported risky activities to ensure all pertinent information was disclosed during the application process.

The beneficiary must file a claim with the life insurance company

The onus of filing a claim with the life insurance company usually falls on the beneficiary. While there is no deadline for filing a life insurance claim, it is recommended that the beneficiary takes a proactive approach and does not delay. The earlier the claim is filed, the sooner the beneficiary will receive their money.

To file a claim, the beneficiary can call the insurance company or start the process online. They will need to provide the following information:

• The insured's full name
• The insured's date of birth
• The insured's state of residence
• The insured's policy number
• The insured's date and cause of death
• A copy of the insured's death certificate

The beneficiary will also need to fill out a claim form, which can usually be found on the insurance company's website. It is important to carefully follow the insurer's instructions to avoid any delays in the payout.

Once the claim has been filed and accepted, the insurance company will review the claim and notify the beneficiary of their decision to pay out, ask for additional information, or deny the claim. This process can take around 30 to 60 days.

If the insured's death occurred during the policy's contestability period or if there are any questions about the cause of death, the insurance company may conduct an investigation, which may delay the payout.

The insurance company will review the claim

Once the beneficiary has completed and filed the claim, the insurance company will review it. They will go over the policy itself and the claim form that was filed. They will also examine the copy of the death certificate, which is the key supporting evidence that proves that the policyholder has passed away. A certified copy of the death certificate can be obtained through the county or through the hospital or nursing home in which the decedent passed away.

If the insurance policy was owned by a Revocable or Irrevocable Trust, the company will also need to review the Trust document to identify the owner and the beneficiary. Most states allow life insurance companies 30 calendar days to review a claim that has been submitted. After they review the claim, they will send a notification regarding their decision to pay it out, ask for additional information, or deny it. In the case of a denial, the company will provide the reason why.

When the insured person passes away within the first two years of the policy being issued, the contestability clause goes into effect. This enables the insurance company to investigate to make sure insurance fraud wasn’t committed. If the policyholder was not truthful when filling out the life insurance application, such as omitting risky hobbies or pre-existing health issues, the insurance company may deny the claim.

If the policyholder passed away while engaged in illegal activity, the insurance company may also deny the claim. In addition, insurance companies will conduct an investigation if the decedent’s death certificate lists homicide. The company may withhold the payout until any applicable charges are dropped.

The company will pay out the claim, deny it, or ask for more information

Once the beneficiary has completed and filed the claim, the insurance company will review it. They will go over the policy, the claim form, and the death certificate—the key supporting evidence that proves the policyholder has passed away.

After the review, the insurance company will pay out the claim, deny it, or ask for more information. Most states allow insurance companies 30 calendar days to review a claim that has been submitted. After this period, they will notify the beneficiary of their decision. If the claim is denied, the company will provide a reason for doing so.

If all goes smoothly, the beneficiary will receive their payout within 30 to 60 days of filing the claim. However, the payout can be delayed for several reasons. Most insurance policies contain a one- to two-year contestability clause, which enables the insurance company to investigate and make sure insurance fraud wasn't committed. If the insured person passes away within the first two years of the policy being issued, the contestability clause goes into effect.

Insurance companies will also typically include a suicide clause that allows them to deny benefits if the policyholder dies by suicide within the first two years of the policy. They may require an investigation of the application if the policyholder passed away due to suicide or if there is a suspicion of fraud.

Insurance companies will also conduct an investigation if the death certificate lists homicide. The company representative may communicate with the assigned case detective to rule out the beneficiary as a possible suspect. The company may withhold the payout until any suspicion is cleared and/or any applicable charges are dropped.

The payout may also be delayed if the policyholder passed away while engaged in illegal activity or was untruthful when filling out the life insurance application, such as omitting risky hobbies or pre-existing health issues.

The beneficiary can choose how they wish to receive their benefit payout

Once a life insurance claim has been approved, the beneficiary can choose how they wish to receive their benefit payout. There are several options to choose from:

Lump Sum

You can elect to receive your benefit in a lump sum payment. This means you get your payout all at once. This is the most popular option, but depending on your benefit amount, you may want to consider other choices. For example, in the US, the Federal Deposit Insurance Corporation (FDIC) only insures up to $250,000 in bank account balances. If the payment were to cause your bank account to exceed this amount, you may want to transfer your balance to separate accounts to ensure its security.

Fixed Amount

You can choose to receive a set amount in monthly instalments to make sure the money doesn’t run out too quickly. For instance, you could request $800 monthly instalments over 10 years for a $96,000 death benefit. The company will hold your money in an interest-earning account, so be aware that any interest earned on the remaining balance is taxable.

Retained Asset Account

Some insurance companies offer the option of a retained asset account. Your death benefit proceeds are transferred into an account that earns interest, and you will receive a checkbook tied to that account. There are a couple of benefits to choosing this option. Firstly, you get to use the cash as you please while it earns interest. Secondly, the insurance company insures the entire amount, even if it exceeds the FDIC limit of $250,000. In other words, for high-balance payouts, this could be a safer option for your money. Keep in mind that you still must pay taxes on any interest earned in your account.

Annuity

You can choose the annuity option. This guarantees instalment payments as long as you live. When you file the claim, the insurance company will use your age and the benefit amount to determine your annuity payments. You can likely ask them to provide you with an estimate to see if this option makes sense, or if you prefer to choose another option.

Other Options

The specific payout options may vary depending on the insurance company and type of policy. For example, some companies offer equal payments over a specified period until the benefit is depleted, or payments designed to last a lifetime.

Frequently asked questions