How Long Does it Take to Get Life Insurance Claims
When an insured dies there isn’t a standard timeline for the process of submitting a claim to the insurance company and then receiving the death benefit. Some misinformation on the internet says that claims must be paid in 30 or 40 days. This is wrong. Insurers have what’s known as a reasonable time to pay a claim. Yes, this is totally vague and means nothing.
The organization that sets standards for claims is the National Association of Insurance Commissioners. They state that once it has become clear that a claim payment is owed the insurer should pay. That guidance has been adopted into most states’ insurance regulations. Delays in life insurance claim payments come from situations where the insurer doesn’t think it’s clear that payment is owed. Mostly in Contestable claims. (Also read: Understanding Life Insurance Claims)
But it’s hard for an insurer to justify not paying a claim immediately if they have a valid death certificate, claim form and the claim is not contestable. We see this situation mostly from insurers who don’t follow good standards and organizational practices. When we do, we work directly with their legal department to quickly get the claim check issued.
In our 30+ years of helping clients collect death benefits no two claims are the same.
Call us for help with your life insurance claim:
1-888-428-4868
Contestable Death Claims
Contestable claims are when the policy is relatively new — 2 years old or less — and the insured dies. These claims are always investigated for fraud and can be denied. Contestable claims can take months, and even sometimes years, to be completed if they are left to the insurance company alone to investigate. We highly recommend anyone with a contestable claim retain the Center for Life Insurance Disputes to represent them during the claim investigation to assure their claim is handled properly and quickly paid.
We see claims wrongly denied all the time. Here are a few examples:
Life Insurance Death Benefits Case Studies
We represented a client where the initial death claim was denied because the insured paid the premium from savings while waiting for a consulting contract bonus to pay. The insurer claimed he did not have enough earned-income for them to issue a policy and were therefore not liable to pay the claim. We showed how the question was vague and a reasonable answer was given. The claim was paid. This is also known as financial underwriting.
In another case we recovered a death benefit claim for a client where the claim was initially denied because there was no named beneficiary. This happens a lot with employer group life insurance.
We recovered another death benefit claim for a client where the initial claim was denied because the autopsy report was misread by the claim underwriter who accused the insured of being a drug abuser. We collected statements from his doctor disputing this accusation and got the claim paid.
These are just some examples of why you need to prepare your life insurance death benefit claim properly, anticipating possible challenges, before you submit it.
How do life insurance claims work?
Read through the policy to determine if there could be any restrictions or stipulations for receiving the death benefit. Check the date of the application. Is it the same as the policy issue date? All benefits start as of the date the policy was issued.
If the insured died within two years of the policy date, the insurance company will almost certainly challenge the death claim. All life insurance policies can be challenged, or contested, by the insurer in the first 2 years.
Review the death certificate for the stated cause of death. If you are submitting a claim under an accidental death policy the cause of death will be extremely important to collecting your claim. Be prepared with documentation.
The insurance company will do several things when they receive a claim. One of the first things they will do is ask the beneficiary to meet with a claims underwriter for an interview.
In this meeting you will be asked about the insured’s medical history, work history, personal life and cause of death.
These people are not there to help you; they are there to uncover anything that may have been hidden from their client – the insurer. Don’t have the meeting alone.
Bring a trusted family member, friend or advisor. The insurer will do a medical investigation in which they will review autopsy reports, toxicology reports and records from doctors the insured visited.
This part of the investigation may go back a few years or several decades. One of our cases required records that went back over twenty years. There will be a financial investigation which can include examining tax returns, social security records and financial aid applications.
We helped a client who had several Limited Partnership interests which the insurance company valued at a fraction of the actual value. We had to collect independent appraisals in order to prove the deceased’s net worth.
Insurance Companies are looking for reasons to deny death benefits
If you are going to submit a death claim be as prepared as possible. Remember that insurance companies are looking for reasons to deny claims. Document interviews and conversations in case you need to go back to the items discussed.
If possible have someone with you during meetings. If the insurance company records conversations keep a record of the time and date. If your claim is denied you must be notified, in writing, as to the reason why.
From this information you can appeal the denial, but it’s always easier to be prepared for the initial claim and collect the death benefit that the insured intended you to have.
For a free consultation to discuss your death claim please contact us at 1-888-428-4868. We don’t require a deposit and we only get paid once we get your claim paid.
We’re experts at collecting difficult death claims even after they have been denied.
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