One of the most common assets in long-term financial planning is insurance. With Life Insurance plans, your future becomes more cohesive. The financial support provided by insurance can help a family through the roughest of times. Filing a claim is not complicated, but it does help to know how the process works.
Filing The Claim
The best life insurance is one that you don’t have to constantly monitor. The family should notify the insurance company to begin the claim process. It complicates the process of getting your claim quickly if you take an extended amount of time to contact the insurance company. Some claims can be made over the phone while others will need to be done by requesting a claims package. Whichever method is chosen, accompanying paperwork is required for evidence. The two most important pieces of paper for a claim are the original insurance policy and the death certificate. Once a request of benefits is made, stay in touch with your provider to see if they need any other paperwork.
There are several options for payout types on a life insurance claim. All of these options should be discussed with an insurance agent that understands your current policy. The three main payout types are lump sum, retained asset account or installments and annuities. For some families, taking a lump sum may be necessary to cover current expenses. But by doing so, they lose the security of long-term payments. The idea is to make sure that your policy and payout type is ideal for your current situation. If your living situation changes drastically after death, then there should be enough flexibility to change the payout type to match the need.
Delays Are Common
Delays happen and can range from short term issues to long term problems. Both are unexpected but can easily be resolved by following up with the insurance provider. There may be issues with a payment if the insured dies too soon after getting insurance. This is to deter fraud and is common across all companies that deal with insurance policies. The best way to deal with this is make sure all of your paperwork is in order. Information that is incorrect on your policy can void or severely delay payments.
In a worst-case scenario, this delay can last up to a full year. That is the extreme case but is possible if the beneficiary lacks the information needed to move the case forward. Problems getting the death certificate from the vital records office causes a problem that is out of the hands of insurance.
When illegal activity is involved in the death, it complicates the original life insurance contract. Driving under the influence will most likely void the majority of life insurance policies. In some forms, this clause also includes death due to risky activities. Consumers should always check clauses in the contract to see how it will affect their payment.
To get peace of mind, consumers should memorize how the claim process works. Anything you don’t understand should be made clear before signing the contract. Communicate with your agent before committing, and it will ensure that both sides have their priorities in order.