Delays tactics by life insurance companies are not unusual. Sometimes they occur because the documents which are provided to them are incomplete or the information provided is inconsistent. On other occasions, there is a question concerning one or more of the beneficiaries, and the insurance company legitimately needs more time to investigate the circumstances. However, it is never a good idea to allow a delayed life insurance claim to sit idle. A delayed claim may turn into a denied claim if it is not promptly and efficiently addressed. If you have concerns, you should retain an attorney to assist you.
Document, Document, Document….
The first thing to do if you’re submitting a life insurance claim is to get your documents together in a well-organized fashion. This includes the following documents:
- A certified copy of the death certificate (with the raised seal) usually available from the funeral home;
- A completed and signed copy of the Life Insurance Claim Form, which can generally be downloaded from the insurance company’s web site (or they will forward it to you).
- A Claimant’s Statement form by the named beneficiary (if required by the insurance company, in addition to, or in lieu of, a claim form).
- The original insurance contract should be collected and returned to the insurance company.
- Proof of your identification should be produced such as your passport, driver’s license, or other government-issued ID card. A copy of your marriage certificate, if relevant, would also be helpful.
Having these materials completed, collected and organized will facilitate and expedite your claim and avoid unnecessary delays.
Details, Details, Details….
Before you even contact the insurance company for the first time, in fact, you should prepare an Information Sheet that contains all of the vital data concerning the deceased party and the beneficiary. The information should ideally contain the following information:
- Full name of the deceased
- Last known address of the deceased
- Age of the deceased at the time of death
- Date of birth of the deceased
- Date of death of the deceased
- Social security number of the deceased
- Funeral home of the deceased
- Life insurance policy number
- Life insurance contract number (if different)
- Life insurance company name (if company has since changed, merged, dissolved, etc.)
- Full names and current addresses of all beneficiaries claiming life insurance death benefits.
- The current age and date of birth of all beneficiaries.
- Where the check(s) for death benefits should be mailed or whether the beneficiary(ies) have elected to have benefits deposited into any alternative accounts.
The Information Sheet should also provide your full name, address, phone, fax, and email contact information so that you can be easily reached for any follow-up communications with the life insurance company.
Dotting Your I’s and Crossing Your T’s
You can never be too careful in dealing with large insurance companies. To avoid delays in processing a life insurance claim, therefore, you should be extremely careful in noting and tracing every communication.
When you speak to a company representative by phone, ask for his or her name, title, direct phone extension, email address, and the claim number assigned to your file. Make a note of the date and time of your conversation, and the subject matter thereof. Send a brief follow-up email confirming your understanding.
When you send documents in the mail, save copies of them for yourself – even if you’re sending those document to your own attorney. Sending those documents by certified mail, return receipt requested will provided you with an additional level of tracking. By dotting your i’s and crossing your t’s in this way, you’ll have the assurance that you’re doing everything necessary to avoid delays.
Why Is It Taking So Long?
A claim for life insurance benefits can be delayed for a variety of reasons. Here are the Top 15 reasons why insurance companies will delay your claim:
- Your application is missing enrollment information (particularly if the policy was issued by an employer).
- The beneficiary listed on your application is a minor (and no guardian is identified).
- No certified death certificate is provided.
- The cause of death was a suicide.
- The deceased failed to name his spouse as a beneficiary, and he died in a “community-property state” where a spouse maintains a 50% interest in the proceeds.
- An estate was named as a beneficiary. Your state may have specific rules governing whether benefits can be paid to an estate, and if so, whether a “small estate affidavit” is required for those benefits to be paid within a certain amount.
- A trust was named as a beneficiary. There may be specific procedures for the trustee to follow in order for the trustee to obtain beneficiary status.
- The beneficiaries are designated in a will or a trust. If beneficiaries are not properly designated on the life insurance contract itself, it will delay the insurance company’s processing of the contract, although a valid will or trust may later be determined to govern who is entitled to proceeds of the life insurance death benefit.
- The named beneficiary on the policy died first (before the decedent whose life insurance is being claimed), and there is no contingent beneficiary.
- The named beneficiary on the policy is divorced from the decedent (and state law automatically removes her as a beneficiary at the time of the divorce), and no new beneficiary was ever named.
- The beneficiary designation refers to beneficiaries in collective or ambiguous terms such as “my children” or “my cousins.”
- The beneficiary designation remains otherwise incomplete.
- More than one life insurance claim has been presented to the company (perhaps by the decedent’s children, a second wife, or a sibling).
- A question has arisen concerning the decedent’s medical condition prior to his death.
- A question has arisen concerning whether the policy was in force, where the policyholder lived, when, if or where notices of lapse were sent, and/or whether the premiums were paid on a timely basis.
What Else Can I Do?
There are four things you can do, from the outset, to ensure that any life insurance claim will be processed efficiently in the future: (a) Provide the correct information; (b) Don’t lie on the insurance application; (c) Make your premium payments are made on time; and (d) Designate a second person to receive premium-due notices from the insurance company.
Insurance companies will scrutinize the life insurance application in every respect. Incorrect or incomplete information may lead to delays or denials down the road, not to mention incorrect premium assessments. Applicants for life insurance are expected to make a full disclosure of their medical conditions. Non-disclosure of relevant facts may result in a delay, in not a denial of coverage. If an insurance company suspects, at the time that a death claim is presented, that a misrepresentation occurred at the time the application was filed, then it will conduct a thorough investigation of medical records dating back to the time of the application and before-hand — and this process will cause further delays.
Long before the decedent dies, and while the life insurance policy is in full force, the policy premiums should be paid on a timely basis to prevent the policy from lapsing. Maintain regular and ongoing contact with the life insurance company throughout the life of the policyholder. Whenever the policyholder (or the person who is paying the premiums) changes his or her address, be sure to give written notice of the change of address to the life insurance company by certified mail (with a postal return receipt), and retain a copy of this written notice and the return receipt for your records. This is important so that you can demonstrate the insurance company knows exactly where to give notice to the policyholder in the event that it ever seeks to terminate the policy for an accidental late payment or non-payment.
If the policyholder can designate a second person to receive premium-due notices or overdue notices from the insurance company, then he or should take advantage of this right by naming a responsible family member to receive those notices. Make sure the insurance company always receives its premium payment on a timely basis so that there is no risk that the life insurance policy is cancelled.
The Law Offices of Mark S. Guralnick can assist you with all of the issues that arise in dealing with life insurance companies. If you are experiencing a delayed or denied life insurance claim, call attorney Mark S. Guralnick at 1-866-337-2900 for assistance.