It’s really not that much work, but there are some unexpected things that pop up during the process that, well, would be handy to know. It might lower the stress level, something that anyone grieving the loss of a loved one would welcome.
First let me say something that is probably long past due being aired. Funeral Homes and their Directors should really listen to their commercials before every meeting with the spouse of a recently deceased person. In advertising they are all about compassion and dignity and helping the family through their loss and grief, but the boots on the ground are a little different. If there is life insurance any where around they have a tendency to almost want to get an assignment on it to them before they’ll accept the body. Life insurance isn’t going to pay anyone anything until there is a claim and the real key, a death certificate. Most state governments take 2-4 weeks to provide certified copies of a death certificate and until that happens any claim for life insurance is on hold. In a perfect world I think it would be so respectful for the bereaved to have time to breathe and get their feet back on the ground before they even have to start thinking about life insurance. I understand that sometimes finances push the subject, but I find it distasteful and disgusting that funeral homes are pushing people to get to the bottom of at least their share of life insurance before the body is even cold. Remember that. Tell them I said they are distasteful and disgusting.
So reality is that there is no rush to file a claim. If someone dies it’s good to notify any insurance companies involved within a week or so. If you have an agent, call the agent and let them carry you through the process. They know the claim isn’t going anywhere until the death certificate is issued so they can bring some calm to the situation. Death certificates are automatically ordered upon death, so if the claim wasn’t made until the certificates were available it wouldn’t be wasting time.
Your agent will discuss with you, well, no, wait a minute! If you still are in contact with the agent that should have been servicing the insurance policy and if that life insurance agent is familiar with the claim process and doesn’t think their job ended when you paid the first premium, then….your agent will discuss with you what to expect. He or she will make the call to the insurance company for you and help you understand the forms. If the policy is still in the two year incontestability period they will explain what that means and will help you to understand how life insurance companies consider and treat the process. They will help you to deal with any redundancy and I think most importantly, when a claim is being investigated help you to understand that companies aren’t looking for ways to get out of paying claims. They are just doing their due diligence as required by law and they will do it as quickly as possible because, remember, when they pay the also pay interest from the date of death to the date the check is signed.
Past the two year incontestability period you can expect a life insurance company to pay a claim within a week of receiving the final claim paperwork, the death certificate. Depending on the company they may ask you to provide a copy of the obituary along with the claim paperwork. They will ask you to send the original policy with the claim and, if you still have it, I always recommend making a copy of the specification page before sending it off. If you’ve lost it through the years they will simply have you sign a lost policy affidavit. They really have a copy and the reason for asking for yours is so it doesn’t come up again at a later date with someone wondering if it is still worth something.
Bottom line. I know I’ve written about the claim process gone wrong in this forum and I won’t say it can’t happen, but it is rare. It’s important to keep in perspective that the last thing any life insurance company wants is bad publicity. They have the money and coming through on a $10,000 or $10 million claim is the outcome they strive for. People say good things about life insurance companies and agents who do their job well. If you have any questions, call or email me directly. My name is Ed Hinerman. Let’s talk.