In insurance language, a “claim” is a formal request to an insurance company for payment under an insurance policy. The payment of a claim is subject to the terms and conditions of the insurance policy. Many insurers have online claim forms and instructions to guide you through this process, including uploading certain documentation.   Others will mail you a claims packet or kit with details on how to file.

How Do I Get a Life Insurance Claim Paid?

The following conditions must be met for a life insurance claim to be payable:

• The individual named as the insured in the life insurance policy must die while the policy is in force.
• The cause of death must be one that is not excluded by the policy. For example, most life insurance policies exclude suicide as a covered cause of death. However, most also state that the suicide exclusion does not apply if the death occurs after the policy has been in force for a specified period of time (often, 2 years). That period is frequently provided by State law.
• A written claim for death benefits must be filed with the insurance company that issued the life insurance policy. It must be filed by the individual or entity seeking payment of the death benefit. The claim form is usually not a part of the insurance policy, so it may be necessary to contact the insurance company to get one. Alternatively, since the insurance agent or agency that sold the policy is usually shown on the policy, he, she or it can be contacted to help to get a claim form.
• A copy of the insured’s death certificate must be submitted with the claim to document the death. Typically, the life insurance company will require a “certified copy” of the death certificate. That is one that has the official stamp or seal of the government authority which issued it. Depending upon where the death happened, the official may be a coroner, a Clerk of Court, or some other official. If there will be a funeral, the funeral home will usually be able to obtain as many certified copies as needed.
• The death certificate should be attached to the claim form and mailed by certified or registered mail to the life insurance company. It can also be sent by a delivery service. The important factor is that there is a way to confirm delivery of it to the life insurance company.

What Happens Next?

Normally, life insurance claims are paid quickly. The insurance company will confirm that the policy was in force at the time of death, and the identity of the beneficiary of the proceeds (which may or may not be you). Remember that an insured usually has the right to change the beneficiary of a life insurance policy at any time before death. If that was done, you might not have been notified of it if you were the original beneficiary. The insurance company will also confirm that all other conditions to payment have been met. Those are usually outlined in the policy, but typically, it does not take the insurer long to do it.

Where’s the Money?

If all goes smoothly, life insurance claims are usually paid quickly. The biggest reason for a delay is usually that the insurance company did not receive all material needed to process the claim. Therefore, be sure to completely fill out the claim form, sign it, attach a death certificate, and provide everything else that the life insurance company requests. If you are still upset about the death and are having a hard time handling the paperwork, ask the insurance agent to help.

Either the life insurance application or the claim form may offer a choice as to how benefits are to be paid. Commonly, they are paid in a single, lump sum. However, there may be an option to receive them in periodic payments or sometimes, as a life annuity. Tax implications can arise from these choices so you may want to consult a tax professional before deciding.

What Could Go Wrong?

Well, a few things, including:

• Assuming that you have the life insurance policy, the name of the company will be shown on it. However, you might be unable to locate the company. The reason could be that the insurance company changed its name or was combined with another one. If that happens, you can contact the Department of Insurance of your State for information. This solution may not always work, but it should be a good start. Go to the National Association of Insurance Commissioner’s website for contact information for each state’s Department of Insurance.
• The life insurance company may have gone out of business. An insurance company may go out of business if it does not have enough money to pay claims or is being mismanaged. There can be two stages to the process: rehabilitation and liquidation.
• 1. Stage 1 – Rehabilitation is when a State Insurance Department tries to get the insurance company back on its feet.
  2. Stage 2 – Liquidation occurs when it looks like there is no hope. Both of these are the insurance versions of bankruptcy and are handled in a very organized way. The processes are administered by State Insurance Departments and claims may be paid from “Guaranty Funds.” These are funds into which all insurers operating in the State pay to cover claims of insurers that become insolvent. Therefore, even though the life insurance company that you are concerned with may be in financial trouble, you still get something. BUT, it is important to get your claim to the Receiver quickly, or else it will be time-barred. This will probably be a claim in addition to the death benefits claim. The Department of Insurance will be able to give you the cut-off dates for filing a claim.
• Out of the blue, someone else files a claim for the death benefits. If he or she is also named as a beneficiary, proceeds will probably be paid according to the beneficiary designation. But, someone may make a claim on some other basis. If you question the legitimacy of it, you must notify the insurance company. It will investigate, but there may be remaining questions. The life insurance company may file a lawsuit (called an action for Interpleader). All people claiming a right to the proceeds will be named as parties to the lawsuit, and the money deposited with the Court. That way, the life insurance company removes itself from the fray and the Court will decide who gets what.

Additional Resources

For more information read our series of posts about life insurance:

• What is Life Insurance and Should Older Adults Buy It?
• How is the Cost of Life Insurance Determined?
• Underwriting: How Insurance Companies Evaluate Your Application

This article was reviewed December, 2023 since it was originally published in April, 2016.