February 15, 2017 // All General
When someone passes away, it can create a great deal of stress for those who are left behind. It is generally an emotional time that can seem overwhelming. The money from a life insurance policy can make that difficult time a little less stressful, helping to ease the financial burden of a funeral and other expenses.
It is helpful to understand what to do if someone who has passed away named you as the beneficiary of their life insurance policy. Here are a few simple steps to follow when making a life insurance claim.
Locate the life insurance policy. If you don't know where the policy is, a good place to look is where other financial documents were kept. If you know the life insurance agent who sold the policy or find their contact information on any documentation, give them a call. The agent should be able to help you get in contact with the life insurance company to start the claims process.
Contact the insurance company. A company representative will walk you through the specifics of what you'll need to do. Generally, the company will require, at a minimum, a certified death certificate and a completed claim form to pay the death benefit.
Choose how you would like to receive the payment. The proceeds are typically paid to the beneficiary in a lump sum. There may also be an option for you to receive installment payments or have the amount held in an account that earns interest. A tax advisor or attorney can help you decide which option makes sense for you.1
Await payment. The insurance company will issue the payment after verifying that everything is in order. Depending on the complexity of the claim, this usually happens within a few weeks after all the necessary documentation is submitted. A check can be sent to you or the funds can be electronically deposited to your bank account.
If you can’t find the policy, but know the name of the insurance company, place a call to inquire. You might also contact the deceased’s accountant or attorney, or check their bank records to see if payments were made to a life insurance company. Keep in mind that the coverage could have been through work, a credit union, or other membership organization.
Your state Department of Insurance may offer free assistance to residents needing help finding policies. You might also consider a policy locator service, such as the Medical Information Bureau, which will charge you a fee to help find the policy.
If you’d like some additional information, download a reference guide from AAA Life Insurance Company – Helpful Advice When Someone You Care About Dies.
If you have questions specifically on your AAA Life insurance policy, contact us.
1 AAA life and its agent do not provide legal, tax or financial advice
When it comes to life insurance, many people rely on what is offered through their employer, and that may not be enough.
An often-heard refrain is, “Buy term and invest the difference.” Others say, “Why rent (term), when you can own (permanent)?”