How to collect a life insurance payout when a loved one dies

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  • Collecting a life insurance payout after a loved one dies is a fairly straightforward process.
  • Start by gathering your loved one’s life insurance documents, preferably before their death.
  • Next, notify the insurer and carefully fill out and submit your claims documents.
  • Policygenius can help you compare life insurance policies to find the right coverage for you, at the right price »

Losing a family member can be really hard. Late last year, my father died from prostate cancer, leaving a big hole in our hearts. But he did one very good thing for my mom decades before finding out he had cancer. He signed up for three life insurance policies that added up to a significant payout.

While I’ve written dozens of articles about life insurance and know the processes well, this was my first time actually going through the steps of collecting life insurance. I learned a few new tips to make the process easier while doing it myself. 

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Here’s what everyone should know about collecting life insurance when someone dies.

Keep close track of life insurance policies

If all goes well, everyone in your family will live a long, healthy life and your relative will outlive any term life insurance policies they may have. I was lucky to have three years’ notice to help my mom get her finances in order before my dad died, and that included getting life insurance policies organized.

Because unfortunate and unexpected accidents and illnesses happen, it’s important to have an open conversation with your family about life insurance. Few people like to talk about their demise, but you can’t collect life insurance payments when you don’t know about the policies.

Common life insurance policies include:

  • Term life insurance
  • Whole or universal life insurance
  • Group life insurance

When organizing your family’s insurance files, make sure to include policies that were bought individually or through an employer benefit plan. Periodically update your records, so you and your family have quick access to any insurance documents in the event of a worst-case scenario.

Notify the insurer of the death

Some financially savvy people may be able to skip to the next step, but my mom and I found it easiest to call each life insurance company to notify them of the death and ask what forms were needed. That way, we didn’t have to guess and risk filling out the wrong form or missing something important.

In all three cases, the insurance companies were friendly and helpful. They were able to email me copies of the claim forms that we could fill out on the computer or by hand. Each insurer has different rules about death certificates — some want notarized originals, while others take photocopies or scans.

List out what your insurer requires and get to work filling out your claim forms.

Complete claim forms and pick a payment method

The bulk of the information required on each claim form was simple and straightforward. We needed my parents’ contact information, my dad’s Social Security number, and basic information about his death. There were no tricks or hoops to jump through, though the long forms were a bit tedious to complete.

One of the most important areas on each claim form asked about how my mom wanted to be paid, as she was the listed beneficiary on each policy. She opted for a direct deposit where it was available, as it’s a secure way to get paid as quickly as possible. Direct deposit is much more secure than the mail, where checks may be lost or stolen.

Before my dad’s death, we opened a new online checking account and investment account in my mom’s name. We used her new checking account for the payments.

Submit claim forms and death certificates

Once you’ve dotted your i’s and crossed your t’s, you can send in your claim form and any required supporting documents. We asked for eight copies of my dad’s death certificate just in case we needed extras. Two of the three life insurers wanted original copies, while the third was happy with a scanned copy submitted via email.

Closely follow any directions on the claim form to ensure your payment is sent out as quickly as possible. If you forget anything, it can add weeks while they ask for missing documents, you send them in, and they take time to process and review everything again.

Follow up if necessary

Hopefully, you’ll see the money show up in your account within a few weeks. If it takes more than two or three weeks, you should consider reaching out to the insurer to ensure your forms have been received and nothing is missing.

If you don’t have life insurance already, it can be a big gift to your dependents if you’re no longer around. The money my mom received didn’t change her life, but it should be enough, combined with other savings and Social Security, to comfortably maintain her standard of living indefinitely. That, after all, is what life insurance is all about.

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