A common misconception: If I'm a named beneficiary on a life insurance policy makers the insurance company will automatically send me a check when my loved one passed. Wrong.
You need to be proactive to get the money you're entitled to. Sometimes families depend on this money to stay afloat after the passing of the bread winner, so it's important to act quickly.
Life insurance companies pay out more than $60 billion (yes, with a B) in life insurance proceeds to Americans each year, but a substantial number of policies go unclaimed because some people just don't know what to do. Here's how to make sure you get what you're entitled to:
1. Find the Life Insurance Information: Company name, policy number, the amount of the policy, etc. If you have a life insurance agent you used to purchase the policy (or your loved for one used), the best place to start is notifying them of your loved one's death. They will be able to assist you from that point instead of you being forced to navigate it alone. If you don't have the policy number, you can call the company and they can look it up for you.
2. Death Certificate: The life insurance company will require proof of death via a sealed original death certificate - meaning the one you got from the coroner/medical examiner's office. Side note: it's always a good idea to order extra death certificates - better to have more than you need than not enough. You'll need to submit the death certificate to the company.
3. Complete the Claim Paperwork: The insurance company will have a standard claim for and related paperwork that will need to be completed to begin the claim. Most can be found online. If you're not sure where to find them, ask the point of contact where you delivered the death certificate for assistance.
4. Send in the Claim Paperwork: This will get the claim process started and get you closer to receiving the money you're entitled to. You'll also have the opportunity to state how you'd like to be paid - lump sum or installments.
5. Wait for the Check: Claims are usually paid quickly - within 1-3 weeks after the claim is initiated. In the meantime, it may be wise to meet with a financial advisor to discuss what to do with the money that's coming.
Hundreds of millions of dollars in insurance proceeds go unclaimed each year. Follow the process above and your money won't be included in that figure.
Paul A. Yokabitus