5 Tips for Filing a Life Insurance Claim

We are making history for the wrong reasons!   In 2020, because of the Covid-19 pandemic, American Life Expectancy declined by almost 2 years (1.87 years).  In 2021, it declined another 0.3 years. 

To give you some perspective, as per the Washington Post, the largest total decline in U.S. life expectancy occurred in 1943 (2.9 years) when U.S. deaths peaked in WWII.

The average American now lives to age 76.60.  This sharp decline places us last compared to the other 19 “wealthy nations” that were analyzed. 

It is hard to find someone that has not been affected by this.  Personally, we lost my Uncle John Intelisano at age 65 due to Covid-19 in February of 2020, when nobody knew what was going on at that time.  In May of 2020, I had 7 clients pass away from Covid-19 in less than one month.  One client, between life insurance and annuities, owned 12 policies.  I spent the better part of June 2020 processing death claims and tracking my clients’ policies. 

Following the death of an insured loved one, it is important to file a life insurance claim in a timely manner!  There is extensive paperwork involved and the process may seem burdensome while grieving!  Beneficiaries must file the necessary paperwork to receive their death benefits (usually tax-free with life insurance) and comply with the law and tax rules. 

It is important to have a process and a checklist, see below:

1. Contact Us: The first step to filing a claim is to contact your life insurance agent or broker.  Remember, an agent represents (works for) an insurance company.  A broker (like us) represents YOU the client.
2. Find ALL Their Policies: When filing claims, some people might not know what types of insurance the deceased owned, and a search is in order.  There is an art to this search as there could be savings bank life insurance, credit card insurance, a military policy or perhaps an old employer policy.  It is important to search old files, safety deposit boxes, bank statements, home safes etc.
3. Organize the Paperwork: Contact the funeral director handling the final arrangements to obtain a “certified copy” of the death certificate for a nominal fee.  We suggest ordering between 8-10 copies upfront even if there are only 3-4 known policies as you might find more using these tips.
4. Choosing a Benefit Payout Plan: With most policies, there are options to choose how the death benefits are to be distributed.  Options include Lump Sum- the entire benefit is paid in a single payment.  Specified Income Provision- The insurer pays the beneficiary both the principal and interest using a set schedule of payments.  Interest Income Option- The life insurance carrier holds the proceeds and pays the beneficiary interest on the sum.  Life Income Option- The beneficiary receives a set income for life.  The payout amount on this option depends on the death benefit amount, the age of the beneficiary, the gender of the beneficiary, and interest rates at the time of death.
5. Processing the Claim- After the claim has been submitted (assuming the paperwork was done properly) processing usually takes between 1-2 weeks.  Insurance companies must analyze the claim, confirm the policy is active, and review the paperwork. 

When we are doing life insurance planning with clients, one of the best features of life insurance we emphasize is that it cannot be accessed by creditors or lawsuits.  To make it easier for family members, we suggest completing a simple “estate directory” which lists policies, policy numbers, beneficiaries, contact people in the event of an unexpected death, and a list of where to find their wills and where files are stored. 

We have access to over 100 life insurance companies, and we regularly track over 2000 types of policies.  Since I am a broker, I represent YOU the client and shop the markets for the most suitable policy at the best price.

We also provide a “Coaching Sheet” with tips on how to obtain the best results on an exam, which can include a blood and urine test.  In my 30 years of experience, I have never seen an insurance broker that provides this!  The less premium you pay, the less money we make!

For more information or life insurance quotes, feel free to reach out to me at Rob@InsuranceDoctor.us!