Term Life Insurance Articles
Proof Of Loss Documents That Will Be Required For A Life Insurance Payout
2011-08-17
Both life insurance buyers and their beneficiaries should understand the process for a life insurance payout. In order for a payout to be processed and for a check to be issued, life insurance companies need proof of loss - basically, they need proof that the policy holder has died. Proof of loss is explained in a life insurance contract and insurance agents can help a beneficiary find and submit the required documents.
Most life insurance companies will simply require a death certificate as a proof of loss. A death certificate is legal proof of a person's death, and by law, insurance companies can only ask for a reasonable proof of loss. Even so, it may be helpful to get several copies of a death certificate soon after the policy holder's death. Having a few certified documents can make the claims process much easier. The beneficiary on a life insurance policy should contact the agent who sold the policy to discuss the claims process. The agent will probably ask the beneficiary to forward a copy of the death certificate through some form of mail with a tracking number, such as USPS certified mail, UPS or FedEx. This ensures that the death certificate is received by the right person and provides a means for tracking down the certificate if it's lost in the mail. Once the certified death certificate is received, a payout will normally occur within a week or two.
The beneficiary may also have to choose a payout method unless the policy holder had already selected this when setting up the policy. Payment options might include a lump sum and a gradual payout. Gradual payouts may be better for tax purposes. If a payout method wasn't selected when the policy was set up, a beneficiary will have to fill out some light paperwork before a payment can be issued. In most cases, this paperwork can be processed within a day or two.
If a life insurance company seems to be intentionally avoiding a payout, a beneficiary can contact their state's insurance commissioner for help. In most instances, a life insurance payout occurs fairly quickly, as standard life insurance contracts are fairly simple. The only exception would be if a policy holder's death could conceivably fall under one of the contract's stated exclusions, for instance if the death was due to a suicide within the first two years of the policy or if the death occurred due to war. Policy holders and beneficiaries should understand that payouts are a standard part of a policy, however, and the paperwork that's necessary for proof of loss is very simple.
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Both life insurance buyers and their beneficiaries should understand the process for a life insurance payout. In order for a payout to be processed and for a check to be issued, life insurance companies need proof of loss - basically, they need proof that the policy holder has died. Proof of loss is explained in a life insurance contract and insurance agents can help a beneficiary find and submit the required documents.
Most life insurance companies will simply require a death certificate as a proof of loss. A death certificate is legal proof of a person's death, and by law, insurance companies can only ask for a reasonable proof of loss. Even so, it may be helpful to get several copies of a death certificate soon after the policy holder's death. Having a few certified documents can make the claims process much easier. The beneficiary on a life insurance policy should contact the agent who sold the policy to discuss the claims process. The agent will probably ask the beneficiary to forward a copy of the death certificate through some form of mail with a tracking number, such as USPS certified mail, UPS or FedEx. This ensures that the death certificate is received by the right person and provides a means for tracking down the certificate if it's lost in the mail. Once the certified death certificate is received, a payout will normally occur within a week or two.
The beneficiary may also have to choose a payout method unless the policy holder had already selected this when setting up the policy. Payment options might include a lump sum and a gradual payout. Gradual payouts may be better for tax purposes. If a payout method wasn't selected when the policy was set up, a beneficiary will have to fill out some light paperwork before a payment can be issued. In most cases, this paperwork can be processed within a day or two.
If a life insurance company seems to be intentionally avoiding a payout, a beneficiary can contact their state's insurance commissioner for help. In most instances, a life insurance payout occurs fairly quickly, as standard life insurance contracts are fairly simple. The only exception would be if a policy holder's death could conceivably fall under one of the contract's stated exclusions, for instance if the death was due to a suicide within the first two years of the policy or if the death occurred due to war. Policy holders and beneficiaries should understand that payouts are a standard part of a policy, however, and the paperwork that's necessary for proof of loss is very simple.
