If you’re a life insurance beneficiary, you’ll want to make sure you’re informed about the process of filing a life insurance claim to make sure you can collect your benefits without any issues. There are a variety of ways in which a death benefit from a life insurance policy can be used, so understanding your options is key. Here are four steps to make sure the life insurance payout goes smoothly.
Four Steps to Help the Life Insurance Payout Process
1. Contact the Life Insurance Company
Typically, you’ll want to contact the life insurance company as soon as possible to begin your claim. The process will vary by carrier, so you may be able to start the process online, or you may have to initiate the claim over the phone. Regardless of the way in which you’ll have to contact the carrier, life insurance companies will usually require certain paperwork and supporting documentation to process the payout.
2. Collect Required Documentation
It will make things easier if you gather all the documentation you may need before you reach out to the carrier. Common documents a life insurance company will ask for include:
Claim form
Death certificate
Obituary or newspaper article, if possible
Copy of the life insurance policy
Proof of beneficiary identity
3. Submit the Life Insurance Claim Form
Once you have provided your documentation, the life carrier will usually have you select how the benefit should be paid out. Having this decision made beforehand will help expedite the process.
4. Understand the Types of Life Insurance Payouts
There are typically three main ways in which a life insurance payment will be distributed. These are:
Lump-sum Payments: The default payout option for most policies, where the entire benefit is released as a lump sum.
Installments and Annuities: The death benefit is divided into payments spanning a certain number of years.
Retained Asset Account: The payout is set up in a structure similar to a checking account, from which you can make withdrawals.
Why Life Insurance Claims May Be Delayed or Denied
The speed at which your life insurance claim will be processed can range anywhere from a week to two months, depending on factors such as how the policyholder passed away and the life insurance company’s procedures. If the insured dies within two years after purchasing the life insurance policy, the claim will fall into the contestability period, where the company will review the claim for fraud or misrepresentation. As long as the life insurance company can confirm the policyholder did not lie on the application, the payout should go smoothly. Life insurance claims can sometimes be denied if premiums aren’t paid on time, if the policyholder died while committing a crime, or if there is proof of fraud or misrepresentation.
Let SelectQuote Find the Best Life Insurance for You
Choosing a life insurance company can be just as important as choosing the policy itself when it comes to ensuring your benefits will be paid out appropriately. With nearly 40 years of experience, SelectQuote can help guide you through your coverage options from trusted carriers in just minutes. We’ll make sure you have peace of mind that your loved ones will be protected—reach out to us today to get started.
