Life Insurance Claim

The 10-step workflow

1. 1

   Get multiple certified copies of the death certificate

   Each life insurance carrier requires an original certified death certificate (not a photocopy). Get 10-15 from the funeral home or vital records office up front. Other agencies (Social Security, banks, retirement plans, mortgage lender) will need their own copies.

2. 2

   Locate the policy documents and policy numbers

   Check the deceased's financial records, employer benefits folder, safe deposit box, and computer files for policy paperwork. If you can't find a policy you believe existed, search the NAIC Life Insurance Policy Locator (a free service that searches participating insurers' records). The state's unclaimed property office may also have records of unpaid benefits.

3. 3

   Contact each insurer to start the claim

   Call the carrier's claims line or open the claim through their website. You'll need: the deceased's full legal name, date of birth, date of death, policy number, and the beneficiary's name and contact info. The carrier will send a claim form (proof of death / death claim form) for the beneficiary to complete.

4. 4

   Complete the beneficiary claim form accurately

   The form asks for beneficiary identification (SSN, date of birth, address), payment preference (lump sum, annuity, retained-asset account), and tax-withholding elections. Inaccuracies delay the claim. If multiple beneficiaries, each typically files individually.

5. 5

   Submit the claim form plus certified death certificate

   Mail or upload the claim form together with a certified death certificate. Some insurers also request a copy of the policy, the obituary, or other supporting documents. Keep copies of everything you submit.

6. 6

   Expect a contestability-period investigation if death occurred within 2 years of policy issue

   Most policies have a 2-year contestability period during which the insurer can investigate the original application for material misrepresentation. If the death occurred within this window, expect the insurer to request medical records, employment records, and other documentation to verify the application was accurate. This adds 30-90+ days to claim processing. If misrepresentation is found, the insurer may rescind the policy and refund premiums rather than pay the death benefit.

7. 7

   Understand the suicide clause if applicable

   Most life insurance policies exclude death by suicide within the first 2 years of policy issue. After the 2-year window, suicide is typically covered. If the death is within the window, the insurer typically refunds premiums paid rather than the death benefit. Some state laws limit the suicide-exclusion period to 1 year.

8. 8

   If there's an accidental-death rider, file separately

   Accidental death benefit (ADB) riders pay an additional amount (often double the base death benefit) if death results from a covered accident. Filing requires documentation of the accident (police report, coroner's report, medical records). ADB riders have specific exclusions — typically illness, suicide, drug overdose, hazardous activities, and acts of war.

9. 9

   Resolve any beneficiary disputes through the insurer or court

   If multiple parties claim to be the rightful beneficiary (e.g., ex-spouse vs current spouse vs adult children), or if the beneficiary designation is ambiguous, the insurer typically files an interpleader action — depositing the death benefit with a court and letting the court determine the rightful recipient. This significantly delays payment. Engage a probate or estate attorney if a dispute arises.

10. 10

    Choose how to receive the proceeds

    Most insurers offer: lump-sum payment to a bank account; a retained-asset account (essentially a checking account at the insurer); installment payments; or an annuity. Lump-sum is most common and generally simplest. Retained-asset accounts pay interest but the insurer's interest rate is often below market. Annuity payouts spread tax efficiency over time but reduce flexibility. For most beneficiaries with no immediate plans, a lump sum into a high-yield savings account is the simplest starting point.

Related

FAQ

How long does a life insurance claim typically take to pay?

For clean claims (death certificate clear cause of death, policy beyond contestability period, no beneficiary disputes), 30-60 days from claim submission is typical. State unfair claim practices laws often require insurers to either pay or explain a delay within 30 days of receiving proof of death. Claims under contestability investigation, with disputed beneficiaries, or involving accidental death rider documentation can take 60-180+ days.

What is a contestability period in life insurance?

The contestability period is typically the first 2 years a life insurance policy is in force, during which the insurer can investigate the original application for material misrepresentation. If a misstatement is found that would have changed underwriting (e.g., undisclosed health condition, occupation, tobacco use), the insurer can rescind the policy and refund premiums rather than pay the death benefit. After 2 years, the policy is generally incontestable except in cases of fraud — state laws vary on the fraud exception.

Does life insurance pay if the insured died by suicide?

Most policies exclude suicide within the first 2 years of policy issue — typically refunding premiums rather than the death benefit. After 2 years, suicide is generally covered. Some state laws shorten the exclusion period to 1 year. Group life insurance (employer-sponsored) often has shorter or no suicide exclusion period. Read the specific policy language to confirm.

What happens if the beneficiary died before the insured?

If the primary beneficiary predeceased the insured and no contingent (secondary) beneficiary is named, the death benefit typically passes to the insured's estate, where it becomes subject to probate and potentially the deceased's debts. If a contingent beneficiary is named, the proceeds go to that person directly, bypassing probate. This is why naming contingent beneficiaries is important — it preserves the bypass-probate benefit of life insurance even if the primary predeceases.

Are life insurance proceeds taxable to the beneficiary?

Death benefits paid in a lump sum to a named beneficiary are generally not subject to federal income tax. Interest earned on retained-asset accounts or annuity payouts after death is taxable. If the policy is owned by someone other than the insured and the insured's estate (a three-party situation), gift tax or estate tax may apply (the Goodman rule). For policies on estates over the federal estate tax exemption, estate tax can apply. State estate / inheritance tax rules vary. Consult a tax professional for individual situations.