Claiming on someone's life insurance policy after they've died (2024)

FAQs

Claiming on someone's life insurance policy after they've died? ›

To claim life insurance benefits, the beneficiary should contact the insurance company's local agent or check the company's website. Some companies ask beneficiaries to start by sending in a form that merely reports the death; they then send the beneficiary a packet of forms and instructions explaining how to proceed.

There is no time limit for beneficiaries to file a life insurance claim. However, the sooner you file a claim for a death benefit, the sooner you will receive your money. Filing as soon as possible makes sense because the insurer could need a month or longer to investigate the claim before paying out.

Most life insurance policies have a default order of payment if you do not name a beneficiary. For many individual policies, the death benefit will be paid to the owner of the policy if they are different than the insured person and still alive, otherwise it will be paid to the owner's estate.

When life insurance claims are denied, it's usually because of dishonest behavior like lying on an application or participating in illicit activities. As long as you're honest during the application process, you and your beneficiaries shouldn't need to worry about life insurance not paying out.

Beneficiaries file a death claim with the insurance company by submitting a certified copy of the death certificate. Many states allow insurers 30 days to review the claim, after which they can pay it out, deny it, or ask for additional information.

Life insurance companies typically do not know when a policyholder dies until they are informed of his or her death, usually by the policy's beneficiary. Even if a policy is in a premium-paying stage and the payments stop, the insurance company has no reason to assume that the insured has died.

At the death of an owner, the policy passes as a probate estate asset to the next owner either by will or by intestate succession, if no successor owner is named. This could cause ownership of the policy to pass to an unintended owner or to be divided among multiple owners.

A will cannot override a beneficiary designation because the policy is a contract between the person who purchases it and the issuer. The only way anyone can override a beneficiary other than the policyholder is if a court determines there's a conflict between named beneficiaries and state laws.

Beneficiary Disputes: In cases where there are multiple beneficiaries or disputes over the rightful beneficiary, the insurance company may investigate to determine the appropriate distribution of the policy proceeds.

Depending on the insurer, a life insurance payout can typically be distributed in three ways: in the form of a lump sum, via a life insurance annuity, or through a retained asset account. Check with the insurer to see which life insurance payout options they offer.

What two items are required for a life insurance claim? ›

File the Death Benefit Claim With the Life Insurance Company

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.

However, if your beneficiary owes money and receives a life insurance payout, that money is now considered their asset. If creditors sue them and win, they may be able to garnish bank accounts. Life insurance money held in those bank accounts could be at risk.

What Is the Life Insurance Contestability Period? The life insurance contestability period typically lasts two years from the date of policy approval. During this time, an insurer has the right to investigate any aspect of a policyholder's health that could have been misrepresented on their application.

Life insurance proceeds usually bypass the estate and go directly to named beneficiaries, but if there are no beneficiaries, the proceeds may become part of the estate assets.

Understanding Life Insurance Inheritance

The policy's beneficiaries are typically spouses, children and other individuals who would suffer a financial loss following the insured person's death. This is called a named beneficiary. You can also designate an estate or trust as the beneficiary.

The payout goes directly to your beneficiaries

In general, the person or entity you list as the policy's beneficiary receives the death benefit, not your estate. This means the funds don't have to go through probate or pay off any outstanding debts before reaching your beneficiaries.

A lot of people name a close relative—like a spouse, brother or sister, or child—as a beneficiary. You can also choose a more distant relative or a friend. If you want to designate a friend as your beneficiary, be sure to check with your insurance company or directly with your state.