The death of a family member or a loved one can be difficult because it not only involves suffering and a whirlwind of emotions but also because there are often many expenses that come with passing away. You will have to pay for funeral expenses, medical bills and other related costs. However, if the deceased had life insurance coverage it can work to ease the monetary worries, since this will provide almost immediate assistance after death.
Before actually getting the money you will have to file what is called a life insurance claim and although the ways in which you can file a claim vary, most of them require you to follow some simple steps.
Step One: Obtain several copies of the death certificate (these can be given to you by the person in charge of the funeral home) stating the date and place of death. It will also help to have the cause of death in case your insurance professional or broker asks you for it.
Step Two: Call your broker or life insurance professional. They will act as the middleman between you and the life insurance company. They will also assist you in filling out the necessary claim form, which might even be online for your convenience. If they ask you any questions about the policy holder, make sure you have their policy number handy.
Also of Note: DO NOT KEEP LIFE INSURANCE POLICIES IN SAFE DEPOSIT BOXES. IN MANY STATES THESE DEPOSIT BOXES ARE SEALED TEMPORARILY AFTER DEATH, WHICH CAN DELAY THE PROCESS.
Step Three: Submit a copy of the death certificate, the claim form you filled out and the policy information to the insurance provider and ask the company about how long will it take for the insurance settlement to be reached.
Step Four: Once the claim is submitted it shouldn’t be long for them to issue you the settlement. Before receiving the money however, you must choose how the proceeds are to be returned to you. You have four options depending on what you want (unless the policy holder prior to his death chose the method).
– Lump Sum of Money: As the name indicates you can choose this option if you want the entire death settlement to be given to you in one payment. The good thing about this option is that it will help you pay for death expenses immediately, and if there is any money left over is yours to keep. For this reason it is said that lump payments offer the claimant the most flexibility of all of the options.
– Specific-Income Provision: With this option the insurance company will either give you payments over a certain period of time or payments of specific amounts. The provider will pay out both principal and interest on a predetermined schedule.
– Life-Income Option: This option gives you a guaranteed income for life that depends on your gender and age at the time of the insured death and also on the dollar value of the death benefit that the policy holder had. What many people like about this choice is that they will receive money through their life that will help them cover expenses and unlike the lump sum choice, you wont have the urge of spending the money in things you won’t need in the future.
– Interest-Income Option: The insurance company will hold the proceeds and pay you the interest on them. The death settlement remains untouched and goes to a secondary beneficiary upon your death.
As you can see, filing a life insurance claim is not difficult at all. The most important thing that will ease the process as you go along is to have the necessary paperwork and to have knowledge of what options are available to you.
If you are concerned about the financial situation that your loved ones would be placed in if you were to pass away unexpectedly then you may need life insurance. Compare multiple life insurance company’s offers side by side. Get a free life insurance quote comparison now!