Complete Life Insurance Claim Process
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Life insurance is a contract signed between an insurer and a policyholder wherein the latter promises to pay a fixed amount of money on a monthly basis to the former for the sake of ensuring an amount of money to be paid to the policyholder’s nominees after his/her death.
Filing an insurance claim on your life insurance policy can mostly happen at a stressful time. So, to make sure that you get all your benefits without allowing stress to hinder or stop you, you should perform the following life insurance claim process steps.
4 Steps of Death Claim Process
Apply the following steps for a successful death claim process.
#1 Inform Your Insurer About the Claim
The first thing you should do is inform your life insurance company about the claim to enable it, to begin with, the claim process.
The requirements include the name, the policy number, the death date, the death cause, and the death place.
The form of the claim intimation can be found on the insurance company’s website as many companies nowadays have those forms online so that policyholders can reach them easily.
#2 Prepare the Required Documents
The documents required for the claim include the death certificate, the original policy documents, the ID proof and beneficiary, the proof of the insurer’s age, the discharge form, any proof of the death cause, police FIR in case the death took place unnaturally, postmortem report in case the death took place unnaturally, hospital reports in case the death was due to a disease, and cremation certificate.
When it comes to early death claims, the steps that should be taken include checking with the hospital whether the dead has been admitted to the hospital or not and checking whether the policyholder was on a plane when the death took place.
#3 Submit the Aforementioned Documents
In order to quicken the claim process, it’s important to submit the documents as soon as possible. This will in fact make sure you obtain all your benefits justly without any delay or lateness.
#4 Settle the Claim
According to law, the insurer is supposed to settle the claim within 30 days from receiving the required documents. In case the claim needs more investigations, the insurance company has to complete the procedures within six months from getting the claim intimation.
Maturity and Survival Claim
The payment that is made by the policy holder’s insurance company to complete the term of the policy is usually called ‘maturity payment’.
The insurance company should inform the policyholder by sending a form for filling it with the details which are needed.
After filling the form, it should be sent back to the insurance company with the IF proof, a passbook copy, original policy documents, and any canceled cheque.
Those riders include accidental riders, waiver of premium rider, critical disease rider, etc. wherein different claim proceedings are a must for those different riders.
When it comes to critical disease riders, medical documents are required. These documents include diagnosis reports and the doctor’s prescription.
Regarding accidental disability riders, an FIR copy, the doctor’s diagnosis report, and the disability certificate are required.
FAQ About the Life Insurance Claim Process
How is a life insurance claim paid?
Once the nominee files a claim, they will have the option to choose how to get paid out. These options depend solely on the insurance policy. Here are some of these choices.
- Lump-sum pay-out: the nominee receives the whole payment in one amount.
- Specific income: the nominee chooses a schedule of payment of a specific amount.
- Life income: the nominee received a monthly income based upon the death benefit.
- Life income with a certain period: the nominee receives payment of a certain amount for a certain period of time.
- Joint and last survival income: in case a joint life insurance policy has been bought and in case the nominee is the surviving spouse, they will receive a fixed amount of money on a monthly basis.
Is there any chance for the life insurance claim to be denied?
Rest assured that life insurance can be denied only during a 2 years contestability period. However, in some states in the USA, this period is only one year.
It’s worth mentioning that this period begins once the policy takes an effect. During this time, the insurance company can probe into the claim and deny it.
A life insurance claim is denied for one of the following two reasons:
- In case the policyholder has given false information. For instance, if the policyholder claimed they had not smoked during the underwriting period and then died due to lung cancer within 2 years of beginning the insurance policy.
- In case the policyholder committed suicide: when this happens within the first 2 years of the policy, the nominee won’t receive any payment, yet they will get a refund of the premiums the policyholder paid.
To your surprise, life insurance claims are considered among the easiest claims to file. If you employ the aforementioned steps and resort to your agent for help, you will never worry too much when it comes to collecting on your demise’s policy.
How can I submit a life insurance claim?
The majority of life insurance claims are processed upon the claimant’s statement receipt completed by the beneficiary, and the death certificate of the deceased. If available, the life insurance contract must be returned to the insurance company.
How can I calculate the amount that should be paid?
In case the coverage was in force, the death benefits are shown on the policy specification page which is considered part of all contracts. Some policies are different in terms of the benefits depending upon the period during which the policy has been in effect.
In order to figure out if this is the case, check out the time passed from the policy effective date to the death date. The specification page of the policy will, in turn, show the benefits due for that period.
There are other factors that can determine the amount to be paid. These factors include policy loans and premium adjustments. If you already know the amount before filing the claim, but you need assistance, you can contact your agent for help as most claimants do.
How can I know who the beneficiary is?
The beneficiary’s name is mentioned within the original application form that is attached to the certificate. Sometimes it can be found on the specification page.
In case the designation of a beneficiary was altered, a copy of the change should be sent to the owner. It’s worth noting that if you’re not able to tell who the beneficiary is; you can simply seek help via email or telephone.
What can I do in case the beneficiary is dead?
If the beneficiary dies before the insured individual, the benefits should be paid to a secondary beneficiary. In case there’s no secondary beneficiary, the benefits go for the insured’s estate.
If the beneficiary dies after the insured and before receiving the benefits, the benefits should be paid to the beneficiary’s estate. After the benefits are paid to an estate, the court appoints a representative to complete the statement of the claimant. Also, a copy of the appointment request must be provided within the other requested documents.
What should I do in case there’s no estate?
The vast majority of the states have payment provisions by affidavit in case the benefits are to be paid to an estate. Yet, the estate won’t be subject to any formal administration. If there’s no estate, contact your agent for help.
Can the proceeds be given to a third party?
The proceeds of life insurance can be paid to funeral homes, cemeteries, or other similar entities in case the beneficiaries execute assignments of proceeds instruments. It’s worth mentioning that cemeteries possess their own proceeds forms assignment.
The signature of the beneficiary should be acknowledged by a notary public in order to honor an assignment of proceeds. Also, all policy numbers should be written on the assignment; and the certain amount paid by assignment should be stated as clearly as possible.
Where can I get a claim form from?
Most of the insurance documents issued by life insurance companies include claim forms. These claim forms are called Claimant’s Statement for Life Insurance Death Benefits. In case you don’t have this form, you can easily download it from the Internet.
How long does it take to process a death claim?
Upon the initial notification, the claim takes about 3 business days. Upon receiving the last requirement, the claim takes about 7 business days.
It’s worth noting that the processing time can take longer in case extra review is needed.