How to Claim Life Insurance Benefits: A Simple Guide for Beneficiaries

how to claim life insurance benefits guide for beneficiaries

Losing a loved one is always hard. It's an emotional time that unfortunately involves a lot of business. One of the many things addressed during this time is life insurance. 

There are normally a lot of questions surrounding this topic, but we're here to help take some stress off of you by giving a step by step guide on how to claim life insurance benefits.

Keep reading to find out what exactly goes into the process of claiming life insurance. 


Contact Insurance Company 

First, you'll need to notify the insurance company of the death by filing a death claim. 

Make sure that you have the death certificate for verification and send along with the completed forms in your claim. If there are multiple beneficiaries, each person will need to submit their own claim and death certificate.


The Waiting Period 

Once you've submitted your paperwork, you'll be subjected to a waiting period. This period can last anywhere between thirty to sixty days for the company to get back with you regarding your claim. 

After your paperwork is successfully processed a decision is made determining if your claim is legitimate or if fraud is detected. In the event that they suspect fraud, an investigation will take place. If you ever run into this issue, and any discrepancy is found, this is when to call a lawyer for legal advice on how to best handle the situation. 


Payment Options 

After your claim gets approved it's time to decide how you want to receive your payments. It's important that you research each option so that you make the best choice for you and your family. 

There are six options to choose from, all with their own pros and cons. These life insurance payout options include the following:


  • Lumpsum Payment - This is the most popular option as it is a one-time payment of the total amount of life insurance. 
  • Life Income With Period Certain - This option guarantees that if something happens to you, that your beneficiaries will receive the payments on your behalf. 
  • Installments - This is also known as a systemic withdrawal plan and it pays out a certain percentage of the benefits for a number of years. 
  • Straight Life Income - Under this plan, beneficiaries receive payments for the rest of their lives. Payments can be made on a monthly, quarterly, or yearly basis. Keep in mind that this only covers you, not your beneficiaries. 
  • Joint Life With Survivorship - This option depends on the lives of two people and pays out as long as one of them is alive. 
  • Interest-Only - With this plan, the insurance company keeps the benefits and pays the beneficiary the interest that it accrues. 

Once you've made your decision, you're ready to begin receiving your payments. 


Now You Know How to Claim Life Insurance 

We hope that our guide brought some clarity and ease to your situation. When you're ready to file a claim, make sure to follow our steps and consult with an attorney if any suspicions arise. 

Grieving is an ongoing, complicated journey, and organizing your loved one's financials while doing so can add even more stress to your life. We wanted to help you out and we hope that we've made some sense out of how to claim life insurance benefits.  

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