Losing a loved one is undoubtedly one of the most challenging moments in life. Amidst the emotional turmoil, practical matters such as dealing with life insurance benefits can add additional stress. But understanding the steps to redeem life insurance benefits now can help streamline the process during a difficult time. We’re providing a step-by-step guide on navigating the life insurance claims process to ensure you receive the financial support you and your family need.
Follow these six steps to file a life insurance claim:
Step 1: Gather relevant documents. The first step in redeeming life insurance benefits is to collect essential documentation. This includes documents such as the original life insurance policy, a death certificate of the insured individual, any amendments or riders for the policy, and other relevant paperwork. Storing these documents in a safe, secure area and having them on hand will facilitate the claims process.
Step 2: Contact your insurance agent. You’ll want to get in touch with an agent at your life insurance company as soon as possible after an insured’s passing. The agent will guide you through the claims process and provide the necessary forms to initiate the claim. Before the call, gather details like the policy number, date of death, and other relevant information about the deceased. Have a pen and paper or blank computer document handy to capture notes or next steps.
Step 3: Complete the claims form. After notifying the insurance company of the insured’s passing, they will send you the necessary claims forms. Ask how these should be returned if it’s not mentioned (some companies have online submission options). Then, complete the forms carefully and accurately. Any errors in these documents could delay processing, so don’t rush. Submit all paperwork to the insurance company.
Step 4: Await the claims decision. Your insurance company will complete a thorough review of your documentation after it’s submitted. The process may take some time, but your team will update you with the outcome as soon as they have it. Feel free to follow up with them or ask additional questions if they arise. Once a decision is made, you’ll be notified about the next steps.
Step 5: Choose a payout option. Life insurance benefits can typically be paid out in several ways. These include lump sum, annuity, and periodic installments. Ask questions, consider your financial needs, and consult with a financial advisor or trusted party to help make an informed decision about your payout.
Step 6: Think ahead with taxes. In many cases, life insurance payouts are not taxable. Certain instances such as receiving interest on a delayed payout, though, may incur taxes. Understand and plan for any potential tax implications of a life insurance claim. Again, feel free to ask your agent or financial advisor for advice and compliance assistance.
Your local, independent agent and our claims team at Frankenmuth Insurance are here to help you through the life insurance claims process. To learn more about filing a claim or about our comprehensive whole life, term life, or business life insurance policies, talk to us today.