The death of someone close is always a difficult and stressful time and there may be legal, financial, and practical issues to be dealt with.
If the deceased person has a life insurance policy in place, then this will ease the financial aspects as a lump sum will be paid to their family or the executor of their will. This can be put towards immediate bills and living expenses, cover funeral expenses, and possibly pay off the mortgage.
If you need to make a claim following the death of a loved one, it helps to know the steps involved and how to make the process go more smoothly.
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Are all life insurance claims paid?
It may be reassuring to know that over 98% of valid life insurance claims are paid out in full, meaning that you will have a lump sum to rely on when you need it most.
Claims are held to be valid when premiums have been paid in full, and where accurate information was given in the initial application.
Life insurance claims are usually only declined in cases where there was not full disclosure of material facts, such as health issues or smoking, in the life insurance application.
Claims may be declined where terms and conditions have not been met, such as the very sad instance of the policy holder taking their own life in the first twelve months of the policy. Cases where a fraud has been carried out will also be declined.
Making a death claim on a life insurance policy
In the first instance following the death of the policyholder, the claimant will need to inform the life insurance company of the death of their loved one.
The life insurance company may need some details such as:
The life insurance company will check that the policy was valid and will, at a minimum, require a fully completed claim form and certified copy of the death certificate to process a death claim.
Other documents
The life insurance company may require additional documents to process your claim, depending on your situation, such as:
Who can claim the death benefit?
If the life insurance policy is owned by someone who is not covered then they are the legal owner. In this instance the benefit will be paid to them.
If the policy is a single life policy, then the death benefit will go to the deceased person’s estate. The money and property of the deceased person is their ‘estate’.
Where the policy is held in trust then the trustee is the legal owner of the policy and the benefit will be paid to them. Putting a life insurance policy in trust has the advantage that the payout will be much quicker as there is no legal delay, such as probate.
If the policy has been assigned, for example it has been assigned to a bank or financial institution as security for a loan or mortgage, then the death benefit will be paid to the bank or third party.
Where the policy is a joint life policy, the death benefit will either be paid to the second policyholder, or, on the death of the second policyholder, will be paid in the same way as a single life policy.
How long does a life insurance pay out usually take?
Once you have notified the life insurance company of the death of your loved one and sent them a completed claim form, the time for the claim to be assessed may vary.
The life insurance company may require further evidence and it can take time to gather all of the relevant information and documents.
The life insurance company may also need input from other parties such as the deceased person’s G.P. or Consultant, financial institutions, or in the event that a postmortem or inquest has been necessary following a death, the coroner.
It may also cause delays if the person has died without making a will, this is called dying intestate.
Your life insurance company is obliged to keep you updated on the progress of your claim, and should also have a complaints procedure if you are unhappy with any aspect of your claim or the decision made by your life insurance company.
Contact Compare Insurance
Compare Insurance can help you find a great quote on life insurance, you can compare and save on this important form of financial protection.
Complete our online assessment, and you can also avail of a consultation with a Qualified Financial Consultant to ensure that you get the best cover for your needs and ensure that life insurance compensation is there for your family should they need it.
