Life insurance is one of the most popular and common components of a sound, long-term financial plan. For you to get the most out of it though, you have to understand how its benefits work so that your beneficiaries won’t have trouble making a claim. In this guide, you’ll learn not only of the claims filing process, but also the types of benefits to expect with today’s life coverage.
Your Payout Options
At their core, life insurance policies pay out a death benefit in the form of a lump sum when the policy holder passes away. Wherever in the country you live, be in the Arizona, Kentucky, Montana, New Jersey, Virginia, or any other state, this is the one guaranteed feature of life cover. In fact, this is how it has always been since its creation. However, more than 200 years after its introduction to the market, life insurance has become more flexible. Although by default, these policies still pay out a lump sum, you now have several choices when it comes to how the cover will pay out.
If you are a beneficiary, you also need to have a copy of the insured person’s death certificate.
Claims Filing 101
Now that you know about the different options for life insurance payouts, you should proceed to learning the essentials of filing a claim. If you are the policy holder, make sure you share this knowledge with your loved ones you want to keep supporting even when you’re gone.
Contact the life insurance provider right away, following the passing of the insured individual. The company will request the beneficiaries to submit documents, including the death certificate, or a copy of it, NerdWallet reports.
Together with the certificate, the insurer will also ask for a claim statement that the beneficiary should sign. In general, this formal letter contains a request for the life cover benefits.
Each provider has their own procedures to address claims, so make sure everyone in your household is aware of which company they should contact.
With all the improvements that life insurance has undergone, it has become even more attractive to individuals who want to strengthen their finances and make sure that they can still provide for the family they will leave behind.