How to Collect on Life Insurance Claims

By Shannon C , last updated December 22, 2011
At the time of a loved one's passing, not only is there the expected and very natural grief that family members struggle through, but often there is the tough issue of paying for the immediate and often quite pricey costs of funeral and burial expenses as well. While this is exactly what the disbursement of a life insurance policy is designed to assist with, many times beneficiaries are unclear on how to collect on life insurance claims and thus end up waiting for their disbursement or paying out of pocket for these expenses, which simply adds to the stress. Here, learn from experts how to collect on life insurance claims and be prepared for when the times comes.
How to File a Life Insurance Claim
The first step in collecting on life insurance claims is to file the claims. While the information for how to do this is contained within the policy or on the insurer's website, often the easiest and fastest way to start the claims proceedings is with a simple phone call. The life insurance agent can direct you to the appropriate forms that must be filled out, and you can send or fax them back the moment they are completed and get the process started. You will need to provide proof of your claim, including a copy of the life insurance policy, a state-sealed copy of the actual death certificate (not a copy), and the banking information for each named beneficiary.
What is a "Contestability Period"?
Beneficiaries must be prepared for the possibility that the life insurance provider may contest the claim. This originates not so much from a direct suspicion of the claim being filed, but from the fact that at times overzealous insurance agents may not have acted in the best of faith when selling policies to individuals who did not meet the requirements of policy eligibility. While it does not happen too often, it can happen, and the key to a successful resolution of a contested claim is simply to be honest, show proof of your claim, and be patient with the life insurance company does their due diligence. During this process, beneficiaries will be speaking with a designed insurance adjuster who is deputized to investigate and resolve the disputed claim. Unfortunately this process can sometimes take as long as several months' time to complete, which can be a difficult waiting period if a beneficiary has already paid for funeral and burial expenses out of pocket. Here it is also important to keep in mind that the response could be a denial of the claim, in which case you may need to go into an appeals or lawsuit process to collect on your beneficiary benefits.
How to Collect on a Life Insurance Claim
Once the contestability period, if any, has concluded and the claim is approve, the beneficiaries can now collect on the life insurance claim and use the funds received to pay for the funeral and burial costs. For most life insurance policies, if the expenses do not exceed the beneficiary payout, then the beneficiaries are legally entitled to keep the difference.
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