What is the time limit for a beneficiary to make a claim on a life insurance policy?

What is the time limit for a beneficiary to make a claim on a life insurance policy? People put off claiming a life insurance policy's death benefit for a variety of reasons. They may not even be aware that they are the beneficiaries of a loved one's policy. Should the beneficiary be concerned about missing out on the payout if the policyholder died months or years ago?

“No,” is the short answer. When it comes to claiming a life insurance benefit, there is no time restriction. You'll collect the money as long as the policy was active at the time of the covered person's death—that is, the premiums were paid and the insurance company had no reason to deny the claim. However, if you want a quick payout, you should file sooner rather than later.

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TAKEAWAYS IMPORTANT

• Life insurance death benefits have no time limit, so you don't have to worry about filing a claim too late.
• You can phone the company or, in many circumstances, start the procedure online to register a claim.
• It's helpful to have a copy of the policyholder's death certificate, as well as their Social Security number and policy number, to expedite your claim.

How to File an Insurance Claim

If you believe you are the beneficiary of a life insurance policy, you should contact the insurance company as soon as possible after the policy owner passes away. You may be able to request a claim form by visiting the company's website, depending on the company. You may be able to finish the entire process online with some insurers.

The carrier will most likely request the insured person's name and date of birth. It may also require the insured's Social Security number or policy number, as well as a copy of the death certificate, in order to expedite a claim.

Because some policies have several beneficiaries, it's critical that each of them fill out a claim form in order to receive a payout. You may also need to send a copy of the primary beneficiary's death certificate if you're a contingent beneficiary, which means you're entitled to all or part of the death benefit if the primary beneficiary dies before the policyholder.

Beneficiary Status Uncertainty

While it's usually a good idea for insured adults to inform loved ones that they're a policy beneficiary, it doesn't always happen. If you're not sure if you're eligible for a payout, you can double-check by going online and using the Life Insurance Policy Locator Service of the National Association of Insurance Commissioners, which searches all of its member companies for matching policies.

Despite the fact that the service is free, it can take up to three months to receive a response. As a result, you should usually start this process only after you've combed through the deceased's personal documents for more specific information on their policy.

Even if you don't notify the insurance company, the policyholder's death is likely to be discovered eventually. This is because insurers in some jurisdictions are required to check their customer lists against the Social Security Administration's Death Master File on a regular basis (DMF). They'll notify any beneficiaries as soon as they learn of the death through that method, albeit it may take a long time.

How Long Do Claims Take to Process?

According to the online brokerage Policygenius, it takes anywhere from one to two months for the insurer to send you the death benefit. However, payment may be delayed for a variety of reasons, including the submission of incorrect paperwork. If the cause of death is homicide, the firm may take longer to investigate the claim because it must rule out the potential that the person in line to receive a financial settlement was involved in the occurrence.

In some situations, the insurance company may refuse to pay the claim outright. The policyholder's death usually falls within the "contestability period" if it occurs within two years of the policy's inception. That implies the company has the legal right to examine the decedent's medical history to ensure that all relevant health issues were declared at the time the policy was created. The insurer may also investigate for any risky activities that the policyholder forgot to declare on their application, such as skydiving. If the person commits suicide during that time period, the firm may be able to withhold a benefit.

Final Thoughts

If you discovered you're the beneficiary of someone's life insurance policy at a later date, don't worry—usually there's no time limit on filing a claim. However, there are a variety of reasons why your payout may be delayed, so gathering as much pertinent information as possible and starting the process as soon as possible is always a good idea.