After losing a family member or business partner, being unable to receive death benefits from their life insurance policy quickly is a frustrating experience as a beneficiary counting on the payout to handle ongoing costs and expenses left behind. Life insurance companies have deadlines for receiving life insurance claims and making payments on the owed benefit. For larger insurers, this process doesn't usually take more than a month after the insured party's passing once a claim has been filed. You can learn about a denial of life insurance.
When a life insurance company takes more than 60 days to process payment for a claim, despite paperwork being in order and the circumstance of death being straightforward, it may be a cause for concern. Typical death benefit requests average around two weeks, though this number varies depending on several factors including:
Supplying the necessary documentation
Workload of claim processors
Time to review policy particulars if in the contestability period
Despite these variables that can delay a determination and payout of death benefits, there are additional ways to minimize wait time.
Requirements for Filing a Claim and Timely Payment of Benefits
While there isn’t a set timeframe to file a claim against a life insurance policy, many state laws will demand prompt payment of benefits due. This highlights the importance of not delaying and beginning the process of receiving your owed compensation right away.
Also, every state has its own rules and regulations that affect life insurance companies differently when it comes to requirements for payout timelines. This means you will need to understand and interpret your jurisdiction's laws or hire an experienced life insurance claims attorney to assist you with this part of the process.
Steps to Speed Up Your Claim
While it’s important to remember that not all claims will experience hassle-free processing of life insurance claims, and could even take longer than average to complete. Many times these types of issues are simply due to the actual process of verifying the validity of the request for death benefits to avoid any potential for fraud. Still, there are some steps beneficiaries can take to help keep delays to a minimum or even avoidable.
Maintain contact with your life insurance company.
Picking up the pieces after the death of the insured can take a lot of time to sort out and can be emotionally taxing. This situation can make it easy to forget to make important callbacks after the life insurance tries to contact you. Always find a way to get back with them promptly to minimize any delays in processing your claim.
Ensure you aren’t missing any documentation.
In addition to any required paperwork to begin the process of filing a death benefits claim, you will also have to provide quite a bit of supporting documentation along with these initial claim documents. From possibly needing to supply the original policy to the original death certificate, there will likely be requests made by the insurance carrier to help process your owed payout.
Have the death certificate already available.
Anytime you file a life insurance benefit claim, you can expect that the insured's death certificate will be necessary to serve as proof of their passing. Companies requesting this document will also not return it to you once they receive it, so it's advised to order multiple copies in case multiple insurance policy claims need to be made.
By keeping these steps in mind, many beneficiaries can keep their death benefit claims progressing at a reasonable pace and receive their payouts in the timeframes they were hoping for.
Why a Life Insurance Claim Could Be Delayed or Denied
A life insurance claim being delayed or denied can occur for various reasons, sometimes for reasons out of your control.
You don’t have all of the necessary documentation.
A primary reason that a life insurance claim slows down is that the insurer has incomplete information or hasn’t received all the requested documentation to make a decision. When filling out paperwork to file a claim, it’s essential to fill in all of the requested details and submit all the necessary documents to help get it processed. Failing to do so invariably increases the amount of time it takes to receive your claim.
The claim occurs during the contestability period.
When an individual purchases a life insurance policy, the first two years are subject to contestation by the insurer if a claim should occur within this period. This means that every aspect of the application and policy will be investigated before a payout occurs. This step ensures there was no misrepresentation of information that would have affected the issuance of the coverage. The decedent's medical records will also be reviewed more thoroughly, as well as the cause of death.
While life insurance companies are supposed to only look for blatant issues of fraud, it’s also possible they could misconstrue a simple mistake like an incorrect birthdate to void the policy and deny benefits.
There is a backlog of claims.
Insurance companies are typically very large corporations that have many different departments with specific functions and dedicated staff. Some companies can experience a backlog of requests if they have a staff shortage or are dealing with a large number of contested death benefit claims. This is still an unusual occurrence. If you suspect that the life insurance company is purposely delaying your claim without good cause, it's important to contact an experienced insurance claims attorney right away.
Hire a Knowledgeable Life Insurance Claims Attorney to Speed Up Your Claim
If you are a beneficiary that is experiencing excessive stalling and delays regarding a life insurance policy claim, take immediate action by hiring one of our experienced claims attorneys to take over your case. Our legal team is available to answer all of your questions and explain your rights regarding your claim, including what next steps to take that will help resolve it.