How to file a life insurance claim and what to do if you’re rejected

Though it might feel overwhelming, start by simply notifying the agency.

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Thinking about money when a loved one passes away is difficult, but the policyholder bought life insurance with the intention of protecting the people left behind. In a way, collecting the benefit is a necessary part of carrying out their wishes. If you’re a beneficiary, getting in touch with the insurance company may be all it takes to get started.

How to make a life insurance claim

Claiming a benefit is relatively straightforward. Follow these steps to make your claim:

  1. Locate the agency. If you don’t have the policy or account number, all you’ll need is the name of the insurance company. Contact an agent who should be able to guide you through the process.
  2. Obtain a copy of the death certificate. The funeral director will usually have this and can make you a copy, but you can also find it by contacting your state or local health department, or by hiring a third party service to request it on your behalf. You’ll need it to submit the claim.
  3. Request and fill out claim forms. An insurance agent will send you the necessary forms to complete the claim. Each beneficiary claiming a part of the benefit needs to complete and sign one of these forms.
  4. Submit the documents. Send the death certificate and the claim forms together to the insurance company.
  5. Receive the money. The benefit could be issued as quickly as one week, and shouldn’t take longer than 60 days to payout. While it will vary, most states have laws in place that require insurers to pay out within a certain period of time.

Are there reasons my claim might be rejected?

The life insurance company can legally reject your claim in the following scenarios:

  • Type of death wasn’t covered in the policy. Some types of death — such as suicide or death during an illegal activity — may not be covered. But this depends on the details of the specific policy.
  • Death happened within the contestability period. Most policies have a contestability period that remains in place for two years after the plan has been purchased. If the policyholder dies before then, the insurance company can launch an investigation and even deny the claim, whether or not the investigation uncovers fraud.
  • Dishonesty during the application process. If fraud is discovered after the policyholder’s death — for instance, if the person lied about smoking on the application but died of smoking-related reasons — then the insurance agency can deny the claim.
  • Policyholder failed to make monthly payments. A policy must be active for a beneficiary to receive the benefit. So if the policyholder had lapsed payments, it could have been terminated.
If the life insurance coverage was purchased through an employer, a disabled employee may be told they don’t need to pay life insurance premiums while on disability. If their employer fails to submit all necessary documents to the insurance company for the waiver of premium, it’ll result in the coverage being terminated without their knowledge. If they die without reinstating the policy — you won’t receive the death benefit.

How to minimize the risks of rejection

There are steps the policy owner can take to avoid the possibility of your claim being delayed or denied if they die. Here are things for the policy owner to keep in mind when buying life insurance:

  1. Don’t lie or leave out information on your application. You may attempt to leave out facts like a smoking habit, or dangerous hobby in order to get cheaper rates — but if you die and the company uncovers that you left out information, your loved ones may never receive the death benefit.
  2. Clarify you understand all questions. Sometimes missing information is an honest mistake, or misunderstanding. You’ll want to be sure you know exactly what you’re being asked before providing an answer.
  3. Take your time. Life insurance applications can be long and complicated. Don’t rush through medical questions, read them carefully and provide answers to the best of your ability.
  4. Double check your application. Before you sign your application, and submit it for review — look over your answers again to ensure nothing was missed.

How do I know if I’m a beneficiary?

The most straightforward way to determine your beneficiary status is to ask the policyholder while he or she is still living.

But according to USA Today, there are billions of dollars of life insurance benefits that have never been paid. If the suspected policyholder has died, these steps can help you determine if one of those payouts might be yours.

  • Look for the paperwork. If you’re managing the estate of a loved one, looking through personal files or old insurance statements can be a simple way of finding the policy and inquiring about your status as a beneficiary.
  • Search online. Databases exist that can help you search unclaimed benefits. The Medical Information Bureau (MIB) is a database that tracks insurance applications. While there’s a $75 fee to run the search, it may be worth it if you think you have an unclaimed benefit.
  • Ask the state. Each state has a collection of unclaimed funds and property. Search for unclaimed property by going to unclaimed.org, choosing your state and clicking search unclaimed property.
  • Find a connection. Did the policyholder have an accountant or estate planner who might have information about the policy? What about a former employer? If the life insurance was purchased through the policyholder’s workplace, they might have valuable information about the policy.

Have the full legal name of the suspected policyholder on hand, as well as their Social Security number and address if you can find it.

What’s the difference between a primary and secondary beneficiary?

The primary beneficiary is the first person chosen to receive the benefit payout. If the primary beneficiary can’t or won’t accept the payout, it goes to the secondary — or contingent — beneficiary.

Will I be paid out immediately?

Generally, insurers have 30 to 60 days to review a claim and pay it. Some states have laws in place to regulate this, and insurance companies can even face the threat of accumulating interest if they take too long.

Whether or not you receive the lump sum all at once depends on which payout method the policyholder chose. Sometimes, the benefit will come in installments or annuities, which will be paid out over the beneficiary’s lifetime.

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Bottom line

While filing a life insurance claim can understandably feel like a weight on your shoulders, the process isn’t meant to be complicated. Talking to the company that issued the policy is the best way to get started.

To find out more about life insurance and how it works, read our guide.

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