What should I know about filing a life insurance claim?

When a loved one dies, you will have many tasks to handle. One of those tasks will be filing a life insurance claim.

The Insurance Information Institute explains that when you file a life insurance claim, it helps to know all the details of the policy. This will enable you to understand if you need to make payout decisions or to be aware of any potential issues that may come up as you try to collect.

Start with the death certificate

The death certificate will be the most important document you will need when filing a life insurance claim. You can get a certified copy from the funeral director. You want to file this with the claim paperwork you get from the life insurance company.

You should be able to call your insurance agent to get the correct documents and assistance with filling out the forms if needed. If you do not know which agent your loved one used, then contact the company and someone there should be able to help you or direct you to the correct agent.

Figure out distribution

Once you file your claim, you will need to come up with a distribution plan. You have a few options, such as a lump sum payment where you get the full amount upfront. You may also choose to only receive the interest on the benefits, which preserves the benefit amount for a beneficiary you name to collect when you die. Another option is to get small payments over time. The exact amount of payments depends on several factors, but the intention is to get them for the rest of your life. A last option is where the company will pay you a benefit at certain times you agree upon, which will spread out the payments over time.