Should you be worried about your Life Insurance claim not getting paid?
When considering life insurance, you might have often wondered about the claim being denied. You have also worried that your near and dear ones might have to fight to get their claim approved.
But should you be worried about it?
Our Trust Life advisors say that it is extremely rare for life insurance companies to reject a death benefit. But it is not impossible.
What you must know
- It is not too easy (almost impossible) to fake death and hence, it’s extremely unlikely that your claim will be rejected by the company, no matter what policy you have with them.
- All life insurance companies are heavily regulated and have billions of dollars in reserve. Even the smallest of all companies have almost zero chance of running out of money to pay your claim.
- There are reinsurance companies that take the burden of your life insurance policy in case the original provider goes out of business (which is again extremely unlikely).
- In case your life insurance provider denies your claim, the company has come up with a very specific reason. If you find yourself in such a position, you can even contest the decision.
How to claim the death benefit
When someone passes away, the first thing you ought to do is to contact your life insurance provider or your life insurance advisor and inform them of the policy (the one holding you as the beneficiary). You will let your advisor or the company know of the fact that the person has deceased.
Soon afterward, you will be given a list of identification documents you need and a few forms to fill out. Some of them are:
- Certification of death: When someone passes away, a coroner or physician gives your family a certificate of death. You will need this proof of death to file a claim.
- Information on the policy: Having as much information as possible on the life insurance policy can be extremely helpful at the time of making the claim. You can talk to the life insurance advisor directly to for such information.
- The claims form: In this form, you will mention your name, policy number, and the cause of death. You will also declare your relationship with the deceased and how you would like to receive the death benefit.
Once you are done with all the information, send it to the life insurance provider. They will do some background policy checks which will include things like checking whether the policy is still active before you have put the claim through.
From there onwards, your job is to wait until the company processes your claim. In case some questions come up along the way, you can answer them easily with the help of your life insurance advisor.
There’s no hard and set rule on the time it takes for the processing of the claim. Most life insurance companies pay out as soon as possible. You can expect a waiting period from a few days to 60 days, depending on the situation.
So finally, should you be worried about your claim being rejected?
To keep it short, we would say “no.”
If you are honest on your application and have paid your premiums on time, you will have no issues when it comes to making your claim.
The two primary fears that people have are that their claim will be rejected outright or the insurance company will run out of money. Both the situations are extremely unlikely to happen.
We would also highly recommend that you talk to a life insurance advisor before filing the claim. That way, your claim will supposedly go through in a much organized fashion. Remember, if you are honest with your application, you have nothing to worry about.