Life insurance policy payments are cash paid to your beneficiary if you die while life insurance coverage is basically.
It is the process of how a life insurance policy pays and the actions you need to take.
- Find life insurance coverage. If you can’t find the plan, contact your life insurance policy representative, the company that issued the plan or the personnel division of the company that registered the team’s life insurance policy plan. If you’re still stuck, check out these additional tips for finding life insurance coverage from the American Council of Life Insurance provider. The last 2 hotel options consist of searching for the NAIC Life Insurance Plan Locator Solution or contacting MIB, an insurance subscription company that offers plan locator solutions at an additional cost.
- Get a certified copy of the death certificate. Check with the specs or area where the policyholder died or with the funeral parlor arrange a solution to get a duplicate.
- Complete a benefit request. This is a claim form from the life insurance policy company that you can receive from your insurance provider or from your life insurance policy representative.
- Select a payment option. You usually have 2 options:
- Round numbers: This option gives you the entire death benefit at once.
- Annuity: This option gives you a death benefit for a certain number of years. The benefits are spent throughout that time, prominently in the larger overall payout (as long as you have enough time to collect all the benefits).
- Send documents to your insurance provider. Do this as soon as possible to prevent delays. Also make sure it contains duplicate trust documents if the plan is owned by the trust.
By this time, your work is probably done. You will only hold off until the insurance company sends you payment by check or direct deposit. It can take anywhere from a few days to a few weeks. Your insurance provider or representative can give you an idea of when to anticipate paying for a life insurance policy.
However, there are times when the payment of a life insurance policy is delayed. Common factors for hold-ups include:
- The plan ends before death occurs.
- Policyholders are not present to pay expenses at the time of death.
- Death occurs for the duration of the contestability. The duration of the contestability is the home time window after which life insurance coverage is issued. During this time, the insurance provider can investigate and reject the claim. The duration of contestability usually lasts a year or more. It is intended to protect insurance providers versus insurance fraud.
- There is deceptive information on the life insurance policy application. Insurance providers will always check to see if the information on the life insurance policy application is truthful. Otherwise—for example, the policyholder dies while skydiving and refuses to have a risky hobby on his application—the claim may be rejected. It’s ineffective to rely on your life insurance policy application—plus, it’s a crime in every way.
- The reason for death is murder. Insurance providers will usually hold off on ensuring that the beneficiary (or beneficiary) is removed as a suspect before approving payment.
A certified insurance representative will help you navigate the life insurance policy payment process and answer any other life insurance policy questions you may have. If you don’t have a representative or consultant to work with, check out our representative locator. You can also work directly with insurance providers. The following are corporate partners who support our charitable causes and can help you find protection directly or through their representatives or advisors. The key is to start today.