How to Claim a Life Insurance Policy

Who can claim the insurance?

A claim can be started by anyone. However, this does not imply if you are already entitled to a payout unless your name is included as a beneficiary of the policy.

Those closest to the deceased usually deal with all financial matters. If you are a close friend, you could start the claim on behalf of the family members.

To start, find out which company holds the life insurance policy, and call them.

SEE ALSO: Is Your Life Insurance In Trust?

Is there a time limit?

Life insurance companies do not draft a timescale, so you can begin a claim after a few weeks if you still need time to grieve for your loss.

When you call to initiate a claim, the insurer will have trained employees to sympathetically deal with your situation, making it a lot easier for you to begin a claim soon after the death.

What do you need to start a claim?

Normally, insurance companies will ask you for the following:

  • The deceased’s name
  • The reason for the death of the deceased (this is indicated at the of the death certificate)
  • The policy number for the life insurance
  • Your name
  • Your relationship with the deceased

The insurer will give you a claim form for you to fill-up, and a list of all the documents that they need you to send them so they can process the claim, a death certificate’s copy, for example.

Who gets to receive the payout?

This depends:

  • If the policy on life insurance was set up in trust: The payout will be given to a nominated person identified on the policy. This may not necessarily be a family member.
  • If the policy wasn’t set up in trust: This is the usual set up of most policies; the payout will be given to the estate of the deceased person, making it subject to inheritance tax.

What if your claim is rejected by the insurer?

Ask for the reason from the insurer, but the most frequent reasons for claims that are rejected are:

  1. Non-disclosure issues: This happens when the policyholder may not have given an honest account of their medical history or the medical history of their family.
  2. The policy had already expired: If the policyholder availed of a term life insurance, it would have lasted only for a set duration, 30 years, for example. If the policy term has already expired, you cannot make a claim.
  3. You have not provided the insurer everything they require: The insurer will be clear in what documents and information that it requires in order to process your claim. They could reject the claim if you cannot provide them with everything they need.

If you believe that the insurer unfairly rejected your claim, you can contact the Financial Ombudsman for help.