Overview
When a policyholder dies, named beneficiaries must file a claim to receive life insurance proceeds. The process typically involves locating the policy, submitting a certified death certificate, completing the insurer's claim forms, and choosing how to receive the proceeds.
For a plain-language introduction to life insurance basics, see Life Insurance: Overview.
Key takeaways
- Locate all policies and certificates before filing a claim.
- Insurers usually require a certified death certificate and claim forms.
- Payments are often quick but can be delayed for documentation or contestability issues.
How it works
Start by searching the deceased person's important papers, safe deposit boxes, and digital records for policy documents or proof of coverage. If you find employer or group coverage, contact those organizations for details.
If no documentation is obvious, insurers and state insurance departments can sometimes help locate a policy. You may also authorize a reputable locator service to search on your behalf.
Once you identify the policy, the insurer will provide paperwork and instructions. Complete the forms, submit a certified death certificate, and return any requested identification or tax forms so the claim can be processed.
What it may cover (and what it may not)
Life insurance pays the policy's death benefit to the designated beneficiary when the insurer accepts the claim. That sum can be paid as a lump sum or left with the insurer under a settlement option that provides interest or installment payments.
Policies do not cover deaths that are excluded by their terms (for example, some policies have contestability periods or exclusions for certain causes). Group policies and creditor-placed policies may have different rules and limits than individual policies.
Common mistakes to avoid
Waiting to search for policies is a common delay; begin the search promptly so you can meet any required deadlines. Missing or incomplete documentation, such as an uncertified death certificate, is another frequent cause of delay.
Avoid assuming the proceeds will automatically be paid without filing a claim; the insurer must receive a claim form and supporting documents. Also confirm beneficiary designations are current and not superseded by a will or estate order.
Questions to ask an agent
Ask what documentation the insurer requires and whether they need an original or certified copy of the death certificate. Also ask about the available payment methods and any tax reporting the insurer will do.
Clarify whether the policy is within a contestability period or subject to exclusions and how long claim processing typically takes. If you need assistance completing forms, consider asking the insurer to help or to assign a case representative.
Next steps
Make a list of likely places to find policy documents (home files, safe deposit box, employer HR records, and accountant or attorney files) and begin contacting those sources. If you want guidance from an agent or need help obtaining policies, you can Individual Life Insurance resources or reach out to a specialist in senior coverage via Senior Life Insurance.
If you prefer professional help locating a policy or completing a claim, consider your options and be prepared to provide proof of identity and your beneficiary status when you talk to an agent.
Frequently Asked Questions
How long does an insurer take to pay a life insurance claim?
Many claims are paid within a few days after the insurer receives complete documentation, but some can take several weeks if additional investigation is required.
What if I can't find any policy documents?
Search the deceased's records, contact former employers and banks, and ask the state insurance department for assistance in locating a policy.
Do beneficiaries need to pay taxes on proceeds?
Death benefits are generally not taxable as income, but if the benefit earns interest or is paid in installments, there may be tax reporting requirements.
Can a beneficiary change how they receive the payment?
Yes, after the claim is approved you can usually choose between a lump sum or settlement options such as installments or interest-bearing accounts.