Life insurance is part of a long-term financial planning. With life insurance, a death benefit is certain. Death benefits can be claimed by beneficiaries once the policyholder dies. A death benefit cannot be claimed right away. There is a process of doing so.
If you are a beneficiary of someone, you need to know how to claim a death benefit. You have to understand that there are certain requirements when claiming it. It can be hard to move around especially when someone dies, but it has to be done. In order for you to learn more, here are the steps on how to claim for a death benefit.
1. Gather All Documents
Your insurance company will have a list of the documents needed to claim for a death benefit. You must know that so there won’t be any difficulties when filing for the amount. Here are the documents necessary to claim for the benefit:
- Death Certificate – this is proof that the policyholder has died. You need to get a certified copy of this form. The death certificate ensures the insurance company that the death is certain and it will prevent fraud.
- The Policy Document– this document has a ll the information of the insurance policy. It contains all details from the policyholder. The insurer will need this so they can compare life insurance policies.
- Get a Copy of the Claim Form– here, you will need to fill out all information about the policyholder. This is the form that the insurer needs in order to process the death benefit. After filling it all out, you will send it over to the insurance company and they will start processing the claim.
2. Get in Touch with the Insurance Company
You ned to contact the insurer to inform them that the policy holder has passed on. They need to know beforehand so they will be prepared to pay-out the death benefit. Of course, this time, you are aware of the documents needed to be processed. Be ready.
3. You Need to Wait for the Processing
Once everything is in place. You already contacted the insurer about the death and already submitted the documents, all you need to do is wait. The insurance company will need to do fact checking. They need to verify all information that is filled out on the form.
Another thing that they need to verify is the insurance policy. It has to be active by the time of death. The wait period will depend on the insurance company. Some may take just a few days. Others can take up to 30 to 60 days.
4. Death Benefit is Ready
There are two option for you on how to receive the death benefit. You can either receive it as a lump sum or as annuity. You get the full amount of the death benefit if you want to receive it as a lump sum. With annuity, the death benefit is uses as an investment. They payment can be receive annually following an annuitization year. How you want to receive it depends on your choice.
It is important for a beneficiary to know the step in filing a claim for the death benefit. Knowing the process will save time and effort from you and the insurer.