Copy Life

After the death of a loved one there are many things to tend to. One that most people don’t look forward to is dealing with financial matters. The funeral costs need to be addressed as do any outstanding bills that the deceased may have had.

For the survivors they may need some guidance when it comes to filing the life insurance policy claim. Not everyone discusses the details of what happens after death with their spouse or partner. Therefore not everyone knows where the important financial documents are kept. If you do know where the life insurance policy is it can make the process much easier.

If you don’t have access to it, you can still find out the details by contacting the insurance company. They will be able to put you in touch with the agent who handled the sale of the policy. He or she will be most helpful as they have first hand knowledge of what the policy covers.

The agent will also be able to arrange a time for you to meet with them. This is an important part of the process as they can help you to fill out all the forms that you are required to submit the claim for the life insurance. Although you can do this yourself it’s wise to have the agent assist you as even a small mistake can cause a delay in payment.

Before you submit the forms you’ll need to obtain a copy of the death certificate. This is necessary as it is proof that the person died. Depending on the cause of death the insurance company may also require additional documentation including an autopsy report. If the death is suspicious or the insurance company suspects that suicide is involved, depending on the policy, they may launch their own investigation.

Any documents that you send in to the insurance company will most likely need to be either originals or notarized copies. This is due to the fact that the company needs to be certain that the person in question really has passed away and from the cause specified.

Once you have sent in the required documentation you will have to wait. In many cases the insurance company will simply authorize payment and the beneficiary will be issued their payment. If there are any questions regarding the documents the insurance company will request more information before authorizing the claim.

If someone close to you has passed and you are unsure about whether or not they did indeed have a life insurance policy you can investigate this yourself. Often a life insurance policy will turn up while going through a person’s personal belongings.

Many people also have a job where they are entitled to an employee life insurance policy. If you suspect this to be the case simply inquire with their former employer after their death. They will be able to provide you with all of the applicable details.

What is the process of filing a life insurance claim?

To start, make sure that you have several copies of the policyholder’s death certificate, which can be obtained by one of the following sources:

•    The hospital from where the policyholder passed
•    The coroner’s office
•    The funeral director

After you obtain the copies, you should get in touch with the policyholder’s life insurance agent, bring them a copy of the policyholder’s death certificate, and complete the claim paperwork. If you don’t know who your policyholder’s life insurance agent was, there is no need to worry. All you have to do is contact the policyholder’s life insurance company, and an insurance agent can assist you there.

How does the death benefit work?

Your death benefit can work in one of the four ways of your choosing:

•    Lump sum – The whole death benefit will be given to you in one payment.
•    Life income – You get a steady income paid out to you for life, but the amount is based on the following:
•    Your benefit amount
•    Your gender
•    How old the policyholder was at the time of death.
•    Specific interest provision – At a pre-determined schedule, the life insurance company will pay you both the interest and the principle.
•    Interest income – The death benefit will remain in tact, and the life insurance company continues to hold the proceeds. You will be paid interest and be the next policyholder in line, and the proceeds will go to the second beneficiary when you pass.

Whichever option you choose, the law demands for life insurance companies to pay you the death benefit in some form or another within days. Check with your local division of insurance to learn more about the legal guidelines.

I can’t locate my policyholder’s life insurance policy. What should I do?

With life insurance, there are no databases to locate a purchased life insurance policy, which explains why policyholders and beneficiaries should know where to locate them. You can try doing the following:

•    Search for records, safes, safe deposit boxes in banks, and storage areas for documents dealing with insurance, check stubs, policy notices, or receipts.
•    Get in touch with the policyholder’s attorney and financial consultants. Usually, policyholders consult with these people to handle affairs after their death.
•    Talk with the policyholder’s employer(s) to see if they purchased a group life insurance policy.
•    Check the policyholder’s tax returns for any type of interest transferred from or to a life insurance agency.
•    Lookout for any annual life insurance premium mailings or dividend notices to come through the mail.
•    If the policyholder resided in Canada at some point, call the Canadian Life and Health Insurance Association to check for a Canadian life insurance policy. Their phone number is (800) 268-8009.
•    Check the MIB Database to find the policyholder’s application that they filled out to obtain a life insurance policy. It costs $75 to look through. Note that one in five life insurance policy applications are found, but it may be worth it.

I’m going through a tough time financially, but I don’t want to end my life insurance coverage. What should I do?

Whatever you do, don’t skip payments on your monthly premiums because it would ultimately lead the life insurance company to terminate your coverage. Here are a few options to take when you are suffering financially:

•    Choose to cash out your policy, which will allow you to discontinue premium payments and accept the available cash value. Be forewarned though that you could be taxed if the cash value exceeds what you paid in premiums.
•    Choose to non-forfeiture, if the option is available to you. A non-forfeiture allows you to stop premium payments for a reduced death benefit without any cash savings. It would also allow you to change your whole life insurance policy to an extended term life insurance policy.
•    Choose to lapse policy, which would terminate your life insurance coverage. However, some insurance companies allow you to reinstate your policy within five years if:
•    You pay all the delinquent premiums and interest
•    You pass a medical exam.

When In Doubt, Ask A Life Insurance Agent

Don’t be afraid to speak to an insurance agent at any time to discuss more about life insurance policies. The more you understand them, the more you will be able to judge what type of coverage is right for you and your loved ones.

staff contribution: Brandon Clayton