Steps to collect life insurance

Life insurance claim

The methods for collecting on a life insurance policy cause 80% of the doubts for clients of this type of insurance. At Dulcinea Insurance, we will explain the various steps to collect life insurance in the United States.

 

Undoubtedly, this topic is of extreme importance, as while it is significant to purchase a life insurance policy to protect the family, it is also very important that your loved ones learn the procedure for receiving the benefit when necessary.


In our Insurance agency We have the best tools to offer you the fastest and easiest service possible. For direct advice, call us at 786-910-9487 and one of our agents will be happy to help you.

How to claim life insurance from a deceased person?

A very common problem for owners of life insurance policies in the USA is that they purchase this protection, but they do not properly inform their beneficiaries about how to collect the life insurance in the event of death.

 

The first thing a life insurance owner should do is notify their beneficiaries that this policy exists. And if possible, give them a copy of the summary page. This way, their loved ones will have all the necessary information on hand for any benefit claim. 


Here is a summary of what the life insurance owner must provide to their beneficiaries so that they can easily collect life insurance, in case of the holder's death.

Basic information for delegating the collection of life insurance

  • Life insurance company name
  • Insurance company customer service phone number
  • Policy number 
  • Amount of protection
  • Protection time
  • Beneficiary Names
  • % for each beneficiary 

 

This way you'll leave your proteges with a clean path to meet the requirements for claim life insurance due to death. 

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Step-by-step guide to claiming life insurance in the United States

Now, if as the owner of the life insurance you have instructed your beneficiaries on how to collect life insurance after death, everything will be very simple in the event that the worst happens (death). This is because insurers do not put many obstacles in the way of making the corresponding payment of the benefit.

Steps to collect life insurance in the USA

  • Contact the life insurance company to notify them of the insured's death. 
  • Obtain the original death certificate of the policyholder. 
  • Fill out the life insurance claim form.
  • Provide copies of supporting personal documents (for the insured and beneficiaries). 
  • Wait for the claim review by the company.
  • Receive benefit payment.

Documents needed to claim life insurance

  1. Original death certificate
  2. Documents proving the identity of the beneficiaries (ID, passport)
  3. Copy of life insurance policy (if available, it speeds up the claims process).
  4. Birth certificates, marriage certificates (possible, to prove relationship with the deceased owner). 
  5. Claim Form (completed and signed by each beneficiary individually).

Average time to collect life insurance

The average time to make the life insurance payment is 30 to 60 days after the death of the insured. However, this may vary depending on the state where we are, the insurer, and the manner in which the insured passed away. In some cases, if all the paperwork is in order, the money can be delivered within the first 10 days.

 

In general, insurance companies take time to pay out benefits because they need to validate the process. This way, they ensure that the claim is valid and there is no attempt at fraud.

When would the life insurance company pay the benefit quickly?

insurance company accelerates the Life insurance claim process if requirements are met, such as:

  • The policyholder's passing was natural.
  • The insured's death occurred after the two-year Contestability Period.
  • The policy was active at the time of death.
  • The beneficiaries promptly and correctly delivered the required documents

We will explain the first two aspects: in the event that the death occurs due to an accident, or in a foreign country, there may be delays.

Similarly, if the death occurs early in the policy, the company has two years to verify misrepresentations in the life insurance (illnesses, fraud, suicide, etc.). 

So, to shorten the timeframe of how long it takes to collect life insurance, it depends not only on how quick and effective the beneficiaries are in contacting the company and submitting the documents, but also on the circumstances in which the death of the insured occurred (cause, location, time).

If an open research by the company (it has every right to do so) the process of how to claim life insurance it may take several months. 

When would the life insurance company NOT pay the benefit?

There are specific cases where a company can deny a life insurance claim:

  • If the insured lies on the application (regarding smoking, drugs, weight, illnesses), the insurance company has two years to investigate and deny claims (contestability period).
  • accidental death from hazardous activities (extreme sports)
  • death in countries at war or in armed conflict
  • suicide within the first two years of the policy
  • death while the insured commits a criminal act

Can an insurance company unfairly deny a life insurance benefit payment?

Now, the situation may arise where the life insurance company deny a benefit claim unfairly. For example:

  • Incorrectly filled out and signed claim forms 
  • Incomplete documentation
  • Administrative errors 
  • Controversies surrounding the insured's death 

In situations like these of unfair denial of life insurance payment, the beneficiaries can file a lawsuit against the insurer, as we will show you now.

What should beneficiaries do if a life insurance company “unfairly denies a claim”?

This situation is not the most frequent. In fact, we can guarantee that most of the time the The process of claiming life insurance is quick and without a hitch.. 

But in the case of a Unjust denial of benefit Regarding life insurance, beneficiaries can take the following actions:   

  1. Request a formal explanation from the insurance company regarding the reasons for the benefit denial.
  2. Make a direct appeal to the insurance company.
  3. File a formal complaint with the State Department of Insurance. 
  4. Hiring a lawyer (in most cases, it's not necessary).  

Very important: these claims and appeals after a denial of life insurance benefits Do you have a time limit (vary by state) between 1 and 5 years. For this reason, it is highly recommended to act very quickly. 

Is there a time limit to collect life insurance?

Technically, insurance companies they do not impose a time limit to claim life insurance.

The law states that the benefit must be paid at any time, regardless of whether it's several years after death, provided that:

  • There is no fraud in the policy declaration (especially if it is discovered by the company during the two-year contestable period).
  • The monthly premium payments were made on time and the insurance was in effect at the time of death.

But be aware, if you wish to answer the question of How long do I have to collect life insurance?, We remind you that if there is a significant delay in the claim,  After three years, the benefit may revert to the state (the state government where the policy was issued), and this can significantly slow down the collection of benefits. 

Can you collect on life insurance without a policy?

Yes, you can collect life insurance without a policy., but for this, beneficiaries must have important data and documents readily available. 

As we mentioned at the beginning of this article, if the beneficiaries have the main life insurance details: Name of the insurance company and policy number, as well as the correct insured information, can now initiate the life insurance claim. Of course, those who claim must be the ones listed as beneficiaries on the life insurance policy. 

It happens that some people know that the deceased relative had life insurance, but they don't know any policy details. In this case, the most recommended course of action is to search through various channels to see if this information can be obtained, as calling each of the more than 700 life insurance companies in the United States is an almost impossible task. 

Some tips for family members searching for a deceased person's life insurance are: 

  • Review the insured's bank statements for any indication
  • contact the work center to verify if I had it through this channel 
  • Speak with the insurance agent who handled your case
  • check in the Life Insurance Policy Locator (NAIC) let's see if the information is saved in these records 

The beneficiaries listed on the life insurance policy can collect the death benefit.

Life insurance can only be collected by the beneficiaries previously stipulated in the contract. These are divided into two types:

  • Primary beneficiary: These are those entitled to the death benefit. 
  • Secondary beneficiaries: They are also known as contingent beneficiaries; these are only entitled to the death benefit if the primary beneficiaries are deceased, unable to collect the policy, or have refused to receive the benefits.

What is the payment method for collecting life insurance?

The Life insurance in the United States It can be paid in different ways; this will depend on the contract previously stipulated by the insured, state laws, or the insurer's guidelines. The most common methods are: 

  • Total amount: in a single payment, 
  • In installments: monthly or annually.
  • With interest options: the company pays interest to the beneficiaries while retaining the principal.  
  • In fixed installments: fixed monthly amounts until the end of the benefit.  
  • With growing benefits: as a way to combat inflation.  
  • Lifetime income option: pension-style. 

Yes, you can access your life insurance while you're still alive.

Yes, it is possible to collect on a life insurance policy while alive. There are several insurance companies that offer the life insurance with living benefits. Without a doubt, this is an excellent protection option because, in addition to death, these policies now also take care of the insured's health against critical, chronic, and terminal illnesses. 

In the event of contracting one of these illnesses (e.g., cancer), the insured has the option to request an advance on the death benefit while still alive. 

The amount of money received while alive depends on factors such as the type of illness, the policyholder's health condition, the coverage amount, and the limitations imposed by the company in the contract. 

To give you an idea: with a life insurance policy of 100,000, the insured may receive approximately 20,000 for a non-serious heart attack; for advanced cancer, they may receive an advance of about 50,000; and in the event of a terminal illness, they may receive up to 80–90 percent of the coverage. 

Usually, that amount paid to you while living causes the life insurance protection to end right there, as insurers use what's called actuarial discounting, where they calculate what the future benefit of the total policy would be worth today, taking into account the current illness. 

Your life insurance agency informs you

If you want to know everything related to Life insurance in the United States don't forget that in Dulcinea Insurance We are here to help you completely free of charge. We have dozens of certified insurance agents and work in over 40 states across the country, to advise the Latino and Hispanic community in the USA in Spanish on how to better protect their families and loved ones.

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