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If you’re a life insurance beneficiary, you might think a check will arrive in the mail after the insured person dies. But unfortunately, insurance companies have no obligation to inform you if you’re a beneficiary. This means you need to be proactive to get your payout.
Life insurance companies paid out a record $100 billion to beneficiaries in the U.S. in 2021, according to the American Council of Life Insurers.
Here's how to file a life insurance claim and get the money your loved one left to you.
Not sure if you’re a beneficiary? There are a few ways to find a lost life insurance policy, including policy locator tools and unclaimed property programs.
How to claim life insurance money
Find the life insurance company name. You don’t need the policy in hand to make a claim, or even the life insurance policy number. If you know the name of the company, the policy number can be looked up for you. The agent who sold the policy or your loved one’s financial advisor may also be able to help you find the company or policy.
Get a certified copy of the death certificate. You’ll need to supply the death certificate when you submit your claim. You can request a copy from your local vital records office or funeral home. The proof of death helps to prevent life insurance fraud and make sure payouts go to the right people.
Collect any supporting documents. This might include a copy of the autopsy, toxicology or police report if your loved one died in an accident.
Fill out the company’s claim paperwork. Many life insurance companies have online claim forms. With other insurers, you’ll need to call to start the claims process, or request a claims packet by mail. It’s important to fill out the paperwork as fully and honestly as possible.
Send in the paperwork. Claim forms typically ask for basic details, like your full name, address, date of birth and Social Security number. You’ll also need to explain your relationship to the policyholder and how you’d like to be paid.
Wait for the money. Insurers usually pay out life insurance claims within days or weeks of receiving the paperwork. There are some cases where the payout might be delayed, such as if the person died within two years of taking out the policy. This is known as the “contestability period,” and it essentially gives insurers the right to investigate the claim.
» MORE: How does life insurance work?
If there are multiple beneficiaries, each person or entity typically must submit their own claims packet. The life insurance company will assess and pay out claims as it receives them.
Ways to receive the money
There are two main ways to receive your money from a life insurance claim:
In a lump sum. You can request a check with the full amount. The insurer may also offer you a draft account. Much like a checking account, this allows you to withdraw money any time, in any amount, until the account has been cleared. Generally, life insurance payouts are not taxable income.
In installments over time. The insurer will hold the money and may offer you some of these choices, with details varying by company:
Interest payments. The insurer pays you regular interest on the balance. The principal may then go to your estate upon your death. Check the insurer’s rules to find out if you also have the option to withdraw from the principal.
Fixed period. The insurer makes regular payments on the principal and interest for a designated period of time.
Fixed amount. The insurer pays a defined amount at regular intervals until the payout and interest are exhausted.
Life income. The payout gets converted into an annuity that provides regular payments for the rest of your life.
Don’t forget to claim other life insurance policies
If the deceased was retired or still working, they may have had group life insurance or supplemental life insurance through the workplace. In this case, when the employer finds out that a worker has died, the benefits department will likely contact any beneficiaries.
Spouses, former spouses and minor or disabled children of a deceased person may also be entitled to Social Security survivor benefits.