Terrible ? but...How hard is it to receive life ins payout?

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Coiled_Snake
Posts: 35
Joined: Wed May 28, 2014 1:44 pm

Terrible ? but...How hard is it to receive life ins payout?

Post by Coiled_Snake »

My wife and I finally have life insurance policies. She got nervous and asked me "What do I do if you die to get the money?"
Not to be too irreverent, but has anyone here gone through the process? Is it as simple as a phone call to the agent/company?
Is there any long drawn-out procedure or is it pretty straightforward?

And, for the record, we love each other. :twisted: :moneybag :shock:
BruDude
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Location: Las Vegas

Re: Terrible ? but...How hard is it to receive life ins payo

Post by BruDude »

Call the agent or insurance company, fill out the claim form, submit a death certificate. Pretty simple.
HIinvestor
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Re: Terrible ? but...How hard is it to receive life ins payo

Post by HIinvestor »

When our relative died, the beneficiaries had to contact the life insurance company. One of them had to submit the death certificate. The funds were paid promptly--I think within 30-60 days of the death, shortly after they received the notarized paperwork. It was quite straightforward. They wouldn't work with the executor but worked very well with both beneficiaries. They even paid interest from the date of death up until the date they wrote the check.
Topic Author
Coiled_Snake
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Joined: Wed May 28, 2014 1:44 pm

Thanks

Post by Coiled_Snake »

Thank you for sharing those details. That is excellent news given the circumstances.
IowaFarmBoy
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Re: Terrible ? but...How hard is it to receive life ins payo

Post by IowaFarmBoy »

We recently went through this with a couple of policies for a parent. One policy was through her former employer, couldn't have been much simpler- submit the death certificate and maybe a short form. The employer might actually have done the paperwork. Probably under a month once we submitted the death certificate. The biggest delay was in getting the death certificate which probably took 3 weeks since they had to be mailed back and forth.

A second small policy was a lot more trouble- kind of a perfect storm. She hadn't told any of us about this policy and when we found it we assumed the beneficiaries were her children, like all her other assets. However, the beneficiaries hadn't been changed since 1963 and were her deceased husband as primary and a brother as the contingent beneficiary. Until the executor was appointed, the kids couldn't get any info about beneficiaries from the company. Customer service at the company was very poor also. The policy was originally written by a small company and the company has been sold a couple of times. The executor finally got the information and the proceeds were paid to her brother, who used it to make a contribution to an educational foundation in their hometown in her memory. A very classy gesture. We'll never know if these beneficiaries were her intent or whether she forgot to update the beneficiaries or if a beneficiary change was lost by one of the insurance companies involved.

The warning from this is to make sure your beneficiaries are up to date and to share that information with the beneficiaries. If things are clear and clean, the process should be smooth, easy and fast.
niceguy7376
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Location: Metro ATL

Re: Terrible ? but...How hard is it to receive life ins payo

Post by niceguy7376 »

A quick question to those that shared their experiences.

How did you know what policies were there to be claimed? I am interested in how to document the info.
dhodson
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Re: Terrible ? but...How hard is it to receive life ins payo

Post by dhodson »

Its very important to inform family or whomever would help you if you needed help of these contracts. Life insurance companies arent exactly looking to pay the claim. You have to make the effort. I would make a copy of the policy and have it kept with the will and other important documents.
IowaFarmBoy
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Re: Terrible ? but...How hard is it to receive life ins payo

Post by IowaFarmBoy »

+1 on telling beneficiaries and having copies.

In our case, she told us about the one from the employer. Otherwise, we could have missed it but we might have thought to check since my employer has one for me.

The other policy that she forgot to mention we found the policy in her safety deposit box along with a bunch of expired/cashed policies on her late husband. We knew this one was still in force because a draft for $1.40 appeared in her bank account every quarter. You can learn a lot about "missed" financial things from bank statements and what comes in the mail.
dhodson
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Re: Terrible ? but...How hard is it to receive life ins payo

Post by dhodson »

IowaFarmBoy wrote:+1 on telling beneficiaries and having copies.

In our case, she told us about the one from the employer. Otherwise, we could have missed it but we might have thought to check since my employer has one for me.

The other policy that she forgot to mention we found the policy in her safety deposit box along with a bunch of expired/cashed policies on her late husband. We knew this one was still in force because a draft for $1.40 appeared in her bank account every quarter. You can learn a lot about "missed" financial things from bank statements and what comes in the mail.
That is also why you need to let people in on your plans way before death. For instance, if any of those polices had been universal polices, they could have lapses accidentally as his health went down hill. The same can be true for LTCi polices. Anything that needs some monitoring or occasional action needs to be discussed.
Deepsea
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Re: Terrible ? but...How hard is it to receive life ins payo

Post by Deepsea »

Mail in Right Thumb and index finger :)
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BL
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Re: Terrible ? but...How hard is it to receive life ins payo

Post by BL »

I have to ask - Did you buy Term Insurance?

Good idea to get some of this information in your head before you think you need it.
Consider having a file or notebook with vital information in it.
Be sure to have an up-to-date will and beneficiaries for everything.
Quickfoot
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Re: Terrible ? but...How hard is it to receive life ins payo

Post by Quickfoot »

Also be aware that if you have children your spouse can file for benefits against your SS while they are under 18 or still in high school, make sure she knows she should and how to do that. Also talk with your spouse about what to do with the money, should some of it go in 529s for kids, should some of it be used to pay off debt, should some of it be invested and if so how?

We are both 34 and I just ran my spouse through all our life insurance policies, how to invest money, how much to spend per year, how *not* to get taken advantage of by financial professionals and where and how to invest the money. I've written letters and recorded videos for my wife and kids for important life events should I not be there for them. I also keep a file with all usernames and passwords and instructions for how to claim life insurance.

My dad died at 35 and my mom at 38 (neither from natural causes) and I've known people that have literally dropped dead in their late 20's with no warning. We never know how much time we have, there's a good chance however that it's less than we think we have.

Also consider arranging funeral / death benefits in advance (even if you don't pay for it at least have the plan in place and discuss with your spouse what your preferences are). It's hard when loved ones die, the last thing you want them worrying about is expenses, whether you wanted to be buried or cremated etc. Most people leave a mess behind, make the commitment to make the transition as easy as you can.


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PugetSoundguy
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Location: Seattle

Re: Terrible ? but...How hard is it to receive life ins payo

Post by PugetSoundguy »

When my Mom collected the benefit on my Dad's policy, it was very straightforward. Just a call to the insurance company, send in a copy of the death certificate, and wait for the check. The interest paid by the company from the date of death until they wrote the check was quite high -- something like 4% I think. Must be a statutory requirement (company in Michigan). As my Mom said, "If I had known that, they could have kept the money for a while longer!"
flyingbison
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Re: Terrible ? but...How hard is it to receive life ins payo

Post by flyingbison »

My partner's father died a couple of months ago, and his widow just had to notify the company and provide a death certificate. Very simple process, BUT ... the insurance agent wanted to set up a time to meet with her in-person, so he could "talk to her about options," i.e., try to sell her some useless investment/insurance crap. We told her to say "no thanks" and they just sent her the check instead. Beware of the scavengers who see someone's death as an opportunity to make more commissions.
HIinvestor
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Re: Terrible ? but...How hard is it to receive life ins payo

Post by HIinvestor »

We helped my relative sort out ALL of her bankers box full of bills and statements in the weekend before she died. She mentioned having paid her premium on her life insurance policy and told the executor and attorney who the beneficiaries were (her surviving brothers). We also went through all the statements she had and put them in order. We made a spreadsheet of all her assets, account numbers, institutions, etc. Having all this information was helpful to the estate attorney in creating the estate documents.

We got her to share her account numbers and passwords of her other accounts--frequent flier, etc. Getting account numbers, passwords, PINs and other similar details is very important. We keep ours in an updated spreadsheet.

Ideally, all the info should be in one place with the estate documents. There's no magic way of knowing what someone else's assets are, though their last tax return and accountant can be very helpful.

WIth another relative, he had stopped making payments on his policy, so I believe only a check for about $10 or so was received.
cherijoh
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Location: Charlotte NC

Re: Terrible ? but...How hard is it to receive life ins payo

Post by cherijoh »

My Mom had a very small life insurance policy and it paid a small premium each year which had to be declared for taxes each year. I took over doing my Mom's taxes after my Dad passed, so I was aware of the policy. In addition, the policy information was in the same fireproof lock box as the will, power of attorney, etc. Both my brother and I were aware of that location. All the mutual fund statements were in binders on a book shelf. Monthly statements (if any) were kept until and quarterly statement arrived, and quarterly statements (if any) were kept until the annual statement arrived. My Mother was not into online banking but she kept very neat records so we had all the information at our fingertips.
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