Did you know a number of life insurance policies go unclaimed every year? If you are the beneficiary of a policy, it is important to know how to go about filing a claim. Many beneficiaries assume the onus is on the insurer to deliver the death benefit check to them once the policyholder passes away. This, however, does not happen in the vast majority of the cases. Beneficiaries will usually need to reach out to insurance providers to get their settlement. Here’s what you’ll need to do to raise a life insurance claim:
- Notify the insurance company of the death: First, you’ll need to find the name of the insurance company and notify them of the death. Keep in mind that even if you don’t have the policy number, the insurance provider will be able to look it up for you.
- Obtain the death certificate: When you submit the claim, you will need to provide the insurer the death certificate of the policyholder.
- Fill out the paperwork: Most life insurance companies have their claim forms up on their website. You can also choose to reach out to the insurer to get the claim form.
- Submit the paperwork and supporting documents: Next, you’ll need to submit the claim form along with any details and documents that the insurer will require to process your claim.
- Wait for the check: The insurer will verify the details you provided in the claims form and release the check, within around two weeks.
How are claims paid out?
A few common ways to receive the death benefit payout are:
- Lump-sum payout: You will be given the entire payout in a lump sum. You can withdraw this amount at any time.
- Lifetime income: The insurer converts the payout into an annuity that will provide payments for the rest of your life.
- Fixed period payout: You will receive regular payments from the insurance provider for a certain fixed period of time.
- Interest payments: The insurance provider pays you interest on the death benefit amount. The balance may become part of your estate.
Although life insurance is probably the last claim you want to file, knowing the steps will ensure you don’t have to stress about collecting on the policy when the time comes.