How Do You Collect On a Life Insurance Policy?
It is the beneficiary’s duty to contact the insurance company. This is why your beneficiary should know who they are. If you are the beneficiary, the first step is to look for the insurance company’s contact information. This can usually be seen in a copy of the policy in the home of the deceased. If you have no knowledge as to where you can find a copy, and you don’t know the name of the provider, then it’s also possible to wait for a bill with the insurance company’s name on it.
Once you have found the company’s contact information, inform them about the death of the policyholder. This can be done with a simple phone call. Some companies may also provide online support. After you’ve done these initial steps, the company will typically send you essential documents that you will need to fill out. They will also tell you about their other requirements. Handing over the death certificate is one of the requirements you will have to satisfy. Once all the paperwork is done, the company will start processing the claim.
If there is suspicion of fraud, then the process will take longer. There should be nothing suspicious about the circumstances of the death of the insured individual. The cause of death must also fall under the margins of the policy. Depending on the circumstances of the death, it may be possible that the company will want to investigate the claim, especially if it happens within the contestability period.
A contestability period is an estimated two year time frame after the policy is purchased. When a claim is done within this time frame, it is typical for the companies to investigate the circumstances. It is possible for individuals to purchase policies while in poor health, and to lie about their condition during the application process. Investigations can take many months, as the company will be waiting on medical and police records about the insured person’s healthy. It is possible for a company to withhold proceeds if they find anything fraudulent.
Most companies will pay out from a range of a few days to a few weeks. If everything goes perfectly right, two weeks is a good time-frame. Most of the time, in order to finance funeral arrangements and other issues, the company will pay you as soon as possible.
Usually, life insurance payout is usually given when the insured person has passed on. There are times when exceptions exist. Some policies will pay out when the insured individual has a terminal illness and he or she only has a limited amount of time to live. If this is the case, then you will need a statement from a physician. The physician will need to affirm the illness and the expected lifespan. If more requirements are needed, the company will inform you.
Because of funeral expenses and lost income, it becomes a need for beneficiaries to receive their proceeds as soon as possible. For this reason, it is useful to know how to collect claims, since one of the most common issues when collecting a life insurance benefit is that the beneficiaries have no knowledge on how to go about the process. Unfortunately, there are times when collecting proceeds are difficult. But, generally, there should not be too much trouble. If an unfortunate death has occurred within your family, insurance companies wouldn’t want to give you even more distress.