When the unexpected happens, and your loved one passes away, the last thing you want is a life insurance company delaying the death benefit. Typically, when the breadwinner is no more, a family can be hit with insurmountable difficulties.
Therefore, the life insurance policy must be there to provide the financial resources needed to take care of the immediate and long-term financial obligations.
If you are a beneficiary in a life insurance policy and the policyholder has passed away, you may be wondering how long it will take before you receive the death benefits. If so, you have come to the right place.
In this post, we discuss the average amount of wait time families endure before receiving the death benefit and what you can do to ensure the process is as smooth and quick as possible.
Filing the Paperwork
Once your loved one passes on and you are the designated beneficiary in their life insurance policy, you need to keep in mind that there is paperwork you will have to submit to the insurance company to kick-start the processing of getting the death benefit.
Some of the basic information that most life insurance companies require include the death certificate, a copy of the deceased’s driving license, and their social security number (SSN). As the beneficiary, you need to make copies of the policyholder’s social security card and driver’s license and submit them to the life insurance company.
How Long Does It Take Under Normal Circumstances?
Most life insurance companies work expeditiously when it comes to handling death benefit claims. The average wait time varies from a few days to as long as two months. However, most claims are paid within 30 days of the death of the insured.
A claim rarely takes more than 60 days to be processed by a life insurance company (assuming you have provided them with everything they need to process your claim). If everything is in order and your claim is quite straightforward, the death benefit can be paid in as little as ten days.
Some of the critical factors that will determine how long it takes to process your claim include the laws in your specific state, how the policyholder died, how fast you turn in all the claim requirements, and the insurance company’s internal procedures.
Each State Has Different Life Insurance Laws
Every state in the country regulates the life insurance companies operating within their respective jurisdictions. To learn how long it may take before receiving your life insurance death benefit, make sure you read and understand your state’s life insurance laws.
While most states have a clause stipulating the maximum amount of time that an insurance life company should take to process death benefit claims, most companies tend to pay claims faster as long as the beneficiary follows the right procedure in filing a claim.
Claim Delays and Denials
Although a life insurance provider can pay your death benefit claim in as little as ten days, there are several reasons why your claim could be delayed or even denied.
If the policyholder passes away within two years of opening the life insurance policy, the claim will automatically fall within the contestability period, during which the insurance provider will be forced to review the claim for misrepresentation or fraud.
During the review process, you could be requested to provide additional information about the deceased’s medical history as proof that he/she did not hide any medical conditions that could have led to an early death.
If the insurance company establishes that the policyholder committed suicide, it will not pay the death benefit. Also, if the policyholder dies while undertaking a risky activity, and he/she failed to mention during the application process, the claim will most likely be denied.
If the cause of death is homicide, the insurance provider may delay processing the claim until the investigation clears the designated beneficiary of suspicion. In fact, if you are the beneficiary and investigations establish that you were involved in the homicide, you cannot receive the money legally.
Your death benefit claim could also be denied if the policyholder died while engaging in illegal activity.
The bottom line is that as long as you have the right documentation to back up your death benefit claim, you can be sure to receive your payout in a good time.
If the policyholder didn’t pay his/her monthly premiums on time or failed to pay at all, then the policy likely lapsed, and the beneficiary won’t receive any death benefit. Unfortunately, the only person who can prevent this from happening is the policyholder.
Every policyholder needs to pay for his/her monthly premium within the 30-day grace period provided by the insurance company.
If something happens that makes it difficult to pay your monthly premium within this period; the policyholder can lower their coverage to lower the cost of monthly premiums or discuss alternative options with the insurance company.
How Do I Know the Exact Value of the Death Benefit?
Sometimes, the policyholder may die abruptly without disclosing the details of his/her life insurance policy. If such a thing happens, you will want to know the face value of the life insurance policy before you start the process of filing for a claim.
If you are not sure how much money to expect in death benefit, make sure you go through the policy documents. The documents should contain a clause disclosing the policy’s face value. However, the rate might vary slightly. Contact a licensed life insurance agent to calculate the expected payout for you.
Get Your Life Insurance Policy Today
A life insurance policy supports your loved ones financially after you are gone. In fact, it is one of the best things that you can leave behind for your family. The life insurance death benefit can be used to repay outstanding debts, replace lost income, and even cover your funeral expenses.
Contact us today and let us help you find the most affordable life insurance policy that will suit your needs. Our licensed insurance agents are always ready to speak with you and listen to your insurance needs.