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How to make a life insurance claim

The time following the death of a loved one can be a deluge of paperwork and administration, as you deal with funeral and burial arrangements, wills and estates, and the clearance and possible sale of a home, all while you cope with loss and grief.

A good life insurance policy is supposed to ease the pain of this transition, providing you with a financial cushion in your time of bereavement. And in general life insurance companies are sensitive and understanding about your loss and try to make the process of claiming on a life insurance policy and receiving this payout as painless as possible.

You don't have to rush to file a claim as you're handling other legal matters and adjusting to life without your loved on: there's no time limit on filing a claim on a life insurance policy. And you typically don't have to worry about the claim being rejected because you botched the paperwork: according to the Association of British Insurers (ABI), 99.6% of life insurance claims are paid out.

When you feel ready to make a life insurance claim following a bereavement, take the following steps:

1. Contact the life insurance provider

You'll first need to reach out to insurance company to notify them of your intention to claim. Information about how to contact the provider will be included with the policy documentation and be posted on their website. Typically, you can contact them by post or phone. Many insurers now allow you to initiate the claims process through their website.

Life insurance policies may have been purchased decades previously and potential beneficiaries may not know from what company. It might be helpful to check the deceased's bank statements, to see to whom they were paying regular insurance premiums. Additionally, insurance firms may have changed their names or merged since the policy was purchased. The Policy Detective site can help you determine the current trading name of the insurer named on policy documentation and how to contact them.

When you contact the insurer, you'll need to initially supply the name of the deceased, their cause of death (which will be noted on the back of the death certificate), and policy number. You'll also have to identify yourself and your relationship to the deceased.

It's important to note that while anyone can start a life insurance claim, the payout will only go to beneficiaries named in the policy or in the decedent's will.

2. Documents required to make a claim

You'll have to provide the insurer with the following documentation to officially make a claim

  • death certificate: You can obtain certified copies from the funeral director. You may want to request several if the decedent has multiple life insurance policies.
  • completed claim form: You can obtain the form from the insurance provider themselves or from their website.
  • policy document: a certificate of insurance should have been issued with the policy when it was purchased. However, policies may have been purchased decades ago and the original documentation could have been misplaced in the interval. In that case, you should seek assistance from the ABI and/or the Unclaimed Assets Register (UAR).

3. Receive the payout

Payouts are typically processed quickly, often within a month and sometimes within a few days. There may be delays if there's dispute or uncertainty about who the beneficiaries are and or if some documentation is missing and needs to be tracked down.

Usually, the beneficiaries of a policy are clear. In the 40% of life insurance policies that are sold as joint policies, the recipient of the payout is the other person on the policy. In the case of single policies, if the deceased's spouse or civil partner is still alive, they receive the payout.

Otherwise, if the policy was set up in trust, as 6% of life insurance policies in the UK are, the payout will go to the person nominated in the policy. If it wasn't, the policy will be paid to the decedent's estate, where it will be distributed according to a will and will be subject to inheritance taxes.

If no beneficiary has been specified in the policy and there's no will (and 60% of people in the UK die without one) a court will have to name a beneficiary, which can complicate the claims process. If this is the case and especially if there's a dispute about who receives the payout, you should seek legal advice and possibly representation.

Additionally, sometimes a payout will delayed if the cause of death is unclear and needs to be investigated. Depending on the terms of the policy, claims can be rejected if the death is determined to be suicide, for instance.

How do you claim on an life insurance policy provided by an employer?

If someone dies while still in work, they may have a "death in service" benefit, a life insurance policy taken out by an employer on behalf of the employee. In that case, you'll have to notify the employer of the employee's death and obtain from them the ‘expression of wish' form that the deceased will have filled out. This will specify the beneficiary of the policy.

Can you ever claim on life insurance before death?

Typically you cannot claim on a life insurance policy while the policyholder is still living; they're designed to be paid out only in death. However, sometimes life insurance policies will offer a terminal illness benefit, which allows the insured sum to be paid out if the policyholder has received a terminal diagnosis. This money can then be used to pay for the person's care until the end of their life.

Why might a claim be denied or reduced?

Very few life insurance claims are rejected. If yours is, the insurer will supply you with a reason. Common reasons include:

  • the policy term ended: Term life insurance policies will have an expiry date (say 25 or 30 years from when they were taken out) and you will not be able to claim after that date.
  • inaccurate information: Insurers are entitled to reduce payouts or outright reject claims if they discover the policyholder supplier inaccurate information about themselves when applying for the policy, such as failing to disclose relevant medical conditions, family medical history, or if they smoke.
  • insufficient documentation: An insurer will deny a claim if you can't supply all the documentation they require. If you're having trouble tracing documentation, you can seek advice from the ABI or the Unclaimed Assets Register.
  • deaths not covered by the policy: Some policies specifically exclude suicides, deaths caused by drug or alcohol misuse or by reckless behaviour. Read the terms of every policy carefully before you commit to it or before you file a claim.

If you disagree with the insurer's handling of your policy, you can contact the Financial Ombudsman for assistance.