When a person covered on a life insurance policy dies how do you go about receiving the benefit from the insurance company?
First Things First:
If the insured person dies within the first 2 years of the policy, then the insurance company reserves the right to explore the validity of the claim and examine the policy application for misrepresentation. This means that a claim can be reduced, if there was an error made in the application, or completely denied if there is evidence of intentional material misrepresentation i.e. insurance fraud. For this reason it is very important to remember that if an applicant fails to disclose information that would cause a policy not to be issued or to have modified rates, then policy may be voided. The burden of proof in this case is upon the insurance company. Claims will also be denied for suicide within the first 2 years of the policy.
When the policy is past the 2 anniversary it is said to be “incontestable” unless there is insurance fraud. This means that the insurance company must honour the claim, even if there were errors on the application.
Processing the Claim:
Processing a claim can seem like a daunting task that needs to be completed in a very difficult circumstance. I often recommend that the beneficiary or a representative (lawyer, executor) of the beneficiary contact the servicing advisor to have the proper documents prepared and the process is laid out. The advisor will require a death certificate and will bring some forms to be signed at your convenience. It is also the advisors responsibility to work on the beneficiary’s behalf to liaison between the insurance company and the beneficiary and to finally deliver a benefit cheque once the claim is processed.
Because of the process involved in completing a claim request it’s recommended that you purchase insurance coverage with a reputable, respectful, and friendly advisor who you trust with your loved ones in a difficult season. If for some reason the servicing advisor cannot be located, the beneficiary may contact the insurance company directly, or the servicing agency for assistance.
If everything moves smoothly, then you can expect to receive the benefit proceeds within 3 weeks of submitting the death certificate.
If you’ve read this article and would like to change your servicing advisor, then feel free to contact us by clicking HERE, or by calling 1-877-755-9293. We’d be very happy to review your current policy and help in any way possible.