How Long Does It Take to Get a Life Insurance Claim Paid?
If you’re frustrated by the amount of time it’s taking to get your life insurance claim paid, here’s what you need to know.
It would be great if we could point to some rule or law that says, Every life insurance claim must be paid in 30 days. But there isn’t any such law. So, how long can an insurer take to pay a life insurance claim? It depends on the claim, but generally an insurer has 30 days after they’ve received all of the information they need to decide a claim is payable.
After settling hundreds of life insurance claims we know we’re your best source for reliable information as to how long you should expect it to take to get your claim paid, and what we can do to make it happen faster.
(First, be careful of what you read and believe on the internet. A lot of claim websites say they can get your claim paid in a few days or a week. These sites, and their service, aren’t legitimate. As with anything, be sure your source of information is credible. Many of these are simply trying to get traffic to their websites, but their information shouldn’t be believed or relied on. If you think that all you have to do is file your life insurance claim and in 30 days you’ll have your money, you’re very likely to be wrong.)
The Center for Life Insurance Disputes
Each claim is different and there are many reasons a claim can get stalled. The problem with the current laws regarding paying claims is that the language of the laws are vague and there’s no penalty to an insurer for taking an excessive amount of time to pay a claim.
Every claim is going to be treated differently. State insurance laws say that a claim must be resolved in a reasonable amount of time. So, one question is, what’s reasonable? It depends on who you ask.
Let’s look at the things that effect how long it takes a life insurance claim to pay.
Is the claim contestable?
If the policy was less than 2 years old when the insured died, or if the policy lapsed and was reinstated within two years of the insured’s death then the claim is Contestable.
A contestable life insurance claim is one in which all answers that were given on the original application can now be investigated for their accuracy. If any question was not answered accurately, it can be grounds for the claim to be denied.
Contestable claims are the claims that take the longest time to get paid. The insurer will request medical records, criminal records, driving records, financial records, prescription history and other documents. Obtaining these records takes time and certainly slows the claim process.
The more doctors that the insured visited lengthens the claim investigation.
What does your State Insurance Department say about how long it can take to get a life insurance claim paid?
If someone tells you that a claim must be paid in 30 or 45 days, they’re wrong. As mentioned above, your state insurance department says that a claim must be processed in a reasonable amount of time.
A claim doesn’t have to be paid until the insurer has all of the information they need to make a claim decision. Only after the insurer has all of the information they need does the clock start ticking for the claim. It’s at this point that the insurer, depending on the state, has 30 or 45 days to make a claim decision. That’s a big difference from the idea that the insurer has 30 days to pay your claim. They have 30 days after they take months to obtain medical, financial and legal records.
If you’re tired of waiting to get your claim money, call us now for help.
What Is the Cause of Death?
Many people think that if the insured died from cancer, and the cancer wasn’t even diagnosed until after the policy was issued, then their claim can’t be denied. This is another false assumption.
A life insurance claim can be denied for reasons completely unrelated to the cause of death. Namely, life insurance claims are denied because the insured didn’t disclose things that he was asked on the application, and that he knew.
For this reason the insurance company is going to go to great lengths to obtain every speck of information that may give them a reason to deny a claim. Of course this can be a very slow and frustrating process for the beneficiary.
The thing that delays a life insurance claim from being paid most often are obtaining medical records. Doctor offices and hospitals will not release medical records unless they have the correct person’s signature on their release form. The beneficiary may not be that person. The beneficiary may have to open an estate just to get the legal right to sign a medical release form.
There are ways around this, but the insurance company isn’t going to tell you what they are or what to do. Because of this it can take months just to obtain the correct signature on the medical release.
If the cause of death was a homicide, the insurer will not pay the claim until the police investigation is complete and closed. If the person who caused the death isn’t found by the police, the claim will remain open and unpaid until that person has been found.
There have been claims that remained open for many years because the person who murdered the insured wasn’t identified until many years later.
Death Certificates and Autopsies
For all life insurance claims the beneficiary must present a final and certified death certificate. In some situations the cause of death cannot easily be determined and therefore a final death certificate won’t be available. The insurer will usually wait to pay a claim until they have a death certificate naming the cause of death and is marked as final.
As you can see from all of these examples, life insurance claims can be delayed for many reasons.
When you’re ready for professional representation for your claim, call us. Our client’s never have to post any money up front. We get paid when you get paid.
More About State Guidance for Life Insurance Claims
The following are regulations for processing life insurance claims in California. Because the original guidelines are from the National Association of Insurance Commissioners (NAIC) they have generally been adopted in a similar form by each state.
Standards for Prompt, Fair and Equitable Settlements:
(a) No insurer shall discriminate in its claims settlement practices based upon the claimant’s age, race, gender, income, religion, language, sexual orientation, ancestry, national origin, or physical disability, or upon the territory of the property or person insured.
(b) Upon receiving proof of claim, every insurer, except as specified in subsection 2695.7(b)(4) below, shall immediately, but in no event more than forty (40) calendar days later, accept or deny the claim, in whole or in part. The amounts accepted or denied shall be clearly documented in the claim file unless the claim has been denied in its entirety.
(1) Where an insurer denies or rejects a first party claim, in whole or in part, it shall do so in writing and shall provide to the claimant a statement listing all bases for such rejection or denial and the factual and legal bases for each reason given for such rejection or denial which is then within the insurer’s knowledge. Where an insurer’s denial of a first party claim, in whole or in part, is based on a specific statute, applicable law or policy provision, condition or exclusion, the written denial shall include reference thereto and provide an explanation of the application of the statute, applicable law or provision, condition or exclusion to the claim. Every insurer that denies or rejects a third party claim, in whole or in part, or disputes liability or damages shall do so in writing.
AND…
(c)(1) If more time is required than is allotted in subsection 2695.7(b) to determine whether a claim should be accepted and/or denied in whole or in part, every insurer shall provide the claimant, within the time frame specified in subsection 2695.7(b), with written notice of the need for additional time. This written notice shall specify any additional information the insurer requires in order to make a determination and state any continuing reasons for the insurer’s inability to make a determination. Thereafter, the written notice shall be provided every thirty (30) calendar days until a determination is made or notice of legal action is served. If the determination cannot be made until some future event occurs, then the insurer shall comply with this continuing notice requirement by advising the claimant of the situation and providing an estimate as to when the determination can be made.
AND…
(d) Every insurer shall conduct and diligently pursue a thorough, fair and objective investigation and shall not persist in seeking information not reasonably required for or material to the resolution of a claim dispute.
What becomes clear after reviewing a State’s guidance for processing life insurance claims is that there is a lot of vagueness and opportunity for an insurer to take as long as they want to process a claim.
It’s our opinion that the only way to expedite the claim process effectively is to employ the Center for Life Insurance Disputes when you file your claim.
Getting Your Life Insurance Claim Paid Quickly
There are too many unknowns during the claims process for the average person. Believing that all you have to do is file the claim papers the insurer is asking for and you’ll have your money in 30 days leave you frustrated. You need experienced representation to move the claim along rapidly and to avoid the many pitfalls that can cause a claim to be denied.
Please take action right now by calling us to discuss the details of your life insurance claim. We’ll tell you what you can expect and how long it should take to get your life insurance claim paid. We’ll tell you how we can expedite that timeline, what you should be concerned about and if your claim is likely to be denied for any reason. The call is free.
