When talking about Life Insurance claims, we will always assume that it is just another insurance policy, one that can be paid out in the case that something unfortunate happens to the insured party. From accidental deaths, to injuries sustained in combat, these can all trigger a payout by the life insurance company, as long as it passes by their strict ruling.
The most grievous problems, though, arise when there is also an estate planning happening that is tied into the life insurance claim. Not only can this cause massive problems for the family members, but it can also cause bitterness if not resolved properly. As such, it is important to figure out what kind of problems there can be when attempting to tie in a life insurance claim to estate planning, as well as how to remedy them.
To start, understanding how Life insurance Claims usually tie into estate planning is important. With many life insurance policies, life insurance claims, if approved, will lead to a payout of some sort. Whether this be a full, one-time payout, or split over many months or years, it is up to the insured member to decide at the time of signing up for the policy. Because of this, there are many ways to make the payouts more secure, as well as ensure that the money will not be used unwisely.
With Estate Planning, it takes the payout system one step further. For some, this means a life insurance trust fund, which will put the benefits money into a safe of sorts, and hold it until deemed by the will of the recently deceased to be allowed out and paid out to the beneficiaries. This is mainly used when attempting to give some benefits to children, or those that may not be of proper age at the time of the death.
There can be hiccups when using such wills and trusts at the same time as an insurance policy. On the beneficiaries side, it is easy to get a denial when the claim made directly contradicts what the will says. For instance, if you were to submit a claim in regards to a trust fund, and wish to withdraw the amount prior to the written date, it may because for a denial.
Another reason for denial could be that the beneficiary that is making the claim is not the same as the beneficiary in the will. This comes down more to the paperwork, and can very well become a massive problem if not taken care of quickly.
The best way to ensure that these denials and problems do not come up often is to hire an experienced life insurance attorney that specializes in finances and estate planning. This is because they will be able to help you in determining if there is something wrong with the will, or if the paperwork in regards to the will and trust definition are not in alignment. They can also help you to make sure that, no matter what, things are settled efficiently and quietly, as no one wishes to fight over finances after a loved one has passed away.