Is it Normal to Take Over Three Months After Filing a claim to Receive Any Money?
The normal time it takes to receive any money after filing a claim should be around five to ten business days after all the paper works, such as a death certificate, had been submitted. Different insurance companies have different guidelines as to when a claimant can receive money after filing a claim. Thus, it is difficult to say what the normal time is.
If all the paper works have been submitted, the insurance company may be able to process the claims in two weeks’ time. To speed up the process, it is necessary for the beneficiaries of the lost loved one or primary policy holder to know the correct process for filing a claim.
When a death happens in the family, life insurance can almost immediately pay out in cash in order to meet the needs of those left behind. However, before one can get that cash, one has to file a claim; and this is what the claimants need to do: first, an individual should call the insurance professional or broker. That person can help one fill out the needed forms, as well as act as intermediary between the claimant and the insurance company. Although one’s insurance professional can assist with the details of filing the claim, one will find it helpful if policies are kept at-hand.
If an individual does not have an insurance professional, or does not know who the agent was, an individual can directly deal with the insurance company. Upon contacting the insurer, one may be asked to secure certified true copies of the death certificate of the lost loved one. This may be obtained from the funeral director. One copy is to be submitted for each claim for a life insurance policy.
Once the claim has been submitted, the beneficiaries should receive settlement within a short period of time. The loved ones who are left behind may receive a lump sum or installment payments. This depends on the beneficiaries’ choice or the policy owner’s initial decision. The beneficiaries may also be able to leave the proceeds in an account. The money will gain interest until it is withdrawn. The insurance company will also handle the settlement based on the guidelines.
Usual settlement options should also be available. A lump sum gives the beneficiaries the option of using the money for immediate financial needs (such as paying for funeral expenses, final debts of the one who has passed on, and present living costs); and investing the rest of the amount. Lump sum payments offer the most flexibility.
There is also an option to have the insurance company hold on to the money for interest income. In this way, the insurance company holds the proceeds and pays interest on them. This may either be for a specified time frame, or until the funds are depleted. Some insurance companies will put the money in a mutual fund or money market, and pays for the current rates in the market.
There is also a life income option. This is also similar to annuity, wherein one is guaranteed income for life. The amount of income the beneficiaries receive depends upon the death benefit, gender, and age at the time of death of the insured. A minimum number of payments may be made, even if the loved one who passed away has only had the insurance for a short time.
So, in order to receive claims for a life insurance policy left behind by a policyholder, one has to undergo this process. There is no specific time period as to how long the entire process may take, but immediately taking care of the paper works may speed up the process.