When a death occurs to a loved one, financial and legal matters often get pushed to the back of people's’ minds. Grief and mourning often take priority as these powerful emotions are hard to ignore. As times passes, loved ones that are left behind are usually able to muster the strength to tend to matters that will help them move on following a death. Matters like legal title transfers and life insurance policy claims. As with any administrative process, it is not surprising that the claims process for many life insurance policies can take some time. Due to this, it is important for beneficiaries of a life insurance policy to plan their finances accordingly and not rely on an immediate payout to make ends meet. That being said, we thought it might be helpful to explain some general guidelines for timelines on life insurance policy payouts for our readers so that they may better adjust their expectations for the payout process. Learn what happens to life insurance with no beneficiary
In a perfect world, all life insurance claims would be quickly approved and payouts sent immediately. However, this is simply not the world we live in. To file a claim, a beneficiary will often need to submit appropriate documentation to the insurance provider. Documents may include a death certificate, proof of beneficiary identity and a completed claims form. From here, the beneficiary would hopefully wait through the administrative process and receive notification of an approved claim in the near future. Insurance providers will often have a timeline by which they must process a claim. This timeline will vary but 30 to 60 days is most common. However, there are instances where the claims process can go beyond this due to a rejection or delay.
In certain situations, an insurance provider may choose to delay a claim after processing the claim. If a provider suspects foul play involved in the insured’s death, they may notify you of a delay. The reason for this may be due to suspected suicide, misrepresentation in the application or other various reasons. While they may not be able to prove it right away, delaying the claims determination will buy them additional time to investigate the manner. If this occurs, the 30 to 60 day timeline may be extended significantly. Depending on the circumstances, an additional 30 days or longer is not unheard of when dealing with a delayed claim. The insurance documents will often detail the conditions under which a claim may be delayed, so it is in your best interest to consult these documents to make sure their reasoning aligns with the contractual obligations. If you believe an unnecessary delay has been placed on your claim, you may consider consulting with an attorney to expedite the process.
Unfortunately, there are many beneficiaries that will have their claims denied. Similar to a delayed claim, an insurance provider will do this if there was suspected foul play involved. An unlikely and sudden death may raise suspicions. If there is enough evidence to show suicide or other acts that would allow the provider to contest a claim, it is likely that they will go straight for a denial over a delay. If this is the case, the timeline for an eventual payout will be extended significantly. A year or more of waiting and work is not unheard of to fight the denial determination. If denied, a beneficiary will often have to go through an appeals process. If this process does not work, some will turn to legal counsel for assistance. If legal counsel gets involved and the claim must go through the process of a lawsuit, it will likely get drawn out a significant amount of time.
Expectations of Claims Process
Hopefully we have provided readers with a better understanding of the claims process and expected timelines. It is easy to see that life insurance claims are a relatively slow moving animal and should be approached with patience. It is understandable that individuals may need the payout sooner rather than later, but being prepared for a long wait both financially and mentally will help the beneficiary cope with a delay. While a long wait may be expected, this does not mean one needs to take the matter laying down. If you feel a delay is unnecessarily long under the circumstances, do not hesitate to reach out to legal counsel for support on your matter.