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How Long Do Life Insurance Claims Take In 2024

Elaine Brookes Steve Case

Author: Steve Case - Insurance Expert

Reviewed & Fact Checked By: Elaine Brookes

Updated: 17th February 2024

How long do life insurance claims take?

Having life insurance is a good idea for everyone. Still, it’s especially important for those who are dealing with a terminal illness or have dependents who will be left behind if they should suddenly pass away.

That’s because life insurance helps pay for funeral costs, debts, and other expenses that can strain the policyholder’s loved ones.

It’s a financial safety net for the bereaved family to fall back on in the event of a tragedy. However, if you should ever need to make a claim, it’s important that you know what to expect and how long the process takes.

Life insurance claims can sometimes be complicated and time-consuming, so it’s important to understand what you’re up against before you start the process. Here is what you need to know about life insurance claims.

Brief Overview

Life insurance is a contract between you and an insurer in which the insurer agrees to pay out a sum of money if you die. You can buy it as an individual policy or get it through your employer.

The amount of coverage you select will depend on your needs, but a good rule of thumb is to buy enough life insurance to cover the cost of burial expenses and any debts you leave behind. If you have children or other dependents who rely on your income, you must also consider their needs.

Life insurance should not be confused with critical illness cover. While they are both similar in some aspects, critical illness insurance policies cover you against certain critical illnesses like heart disease and cancer rather than death.

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How Do You Make a Life Insurance Claim?

If you’re dealing with the loss of a loved one, it can be hard to think about anything other than your grief. However, if that loved one died before their time and had a life insurance policy, it’s important to know how to make a claim on that policy.

The first thing you need to do is contact the life insurance company.

You will need to provide them with details about your loved one’s death, including:

  • A copy of the death certificate
  • Evidence that your loved one was insured (a copy of their policy)
  • A police report if they died as a result of an accident
  • Any other documentation relating to their death

You may also have to provide evidence that you were named as a beneficiary on your loved one’s policy at some point. You may also have to prove that no changes were made after certain dates.

For example, if they made changes after their age limit had been reached for continuing cover with their insurer.

You may also need to supply evidence of your relationship with the deceased, such as a birth certificate, marriage certificate, or any other document that proves your relationship.

Once the life insurance company has received all the necessary documentation, they will investigate your loved one’s death and decide whether or not to pay out on their policy. They may also ask for additional information, such as medical records or an autopsy report.

If the life insurance company does agree to pay out, they will send you a check for the amount of money that was insured under your loved one’s policy.

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What Can Cause a Life Insurance Claim To Be Denied?

There are several reasons why a life insurance claim may be denied. Some of the most common include:

Failure to Pay Premiums or Late Payments

One of the biggest reasons why life insurance claims are denied is because the policyholder has failed to pay their premiums or has paid them late.

For example, if you were paying your premiums on the 15th of every month and stopped paying them altogether, you would be considered delinquent, and your claim would be denied.

So if you suddenly pass away, your loved ones would not be able to collect the death benefits because you failed to pay your premiums on time.

Failure To Disclose Important Medical Information

While it’s normal to want to disclose as little information as possible when applying for life insurance, the truth is that failing to disclose important medical information can cause a life insurance claim to be denied after death.

For example, when you apply for a new policy, it’s important to disclose any medical conditions or illnesses that you are aware of.

If your application is denied because you failed to disclose this information and then later on in life, your medical condition worsens, or you die of the illness, the insurer can use the contestability clause to contest the claim.

The contestability clause states that if there is any evidence of fraud or misrepresentation on behalf of the insured, then the insurer does not have to pay out on the claim.

This means that if the insurer finds evidence that the policyholder misrepresented their health or other information when applying for the life insurance policy, they can contest the claim.

This is why it’s important for anyone taking out a life insurance policy to be 100% honest about their medical history. Otherwise, any premiums the person pays could be wasted, and their family could be left without the financial support they intended to provide them.

Failure To Disclose Lifestyle Information

In addition to medical history, it’s also important to disclose any lifestyle information that might be relevant when you apply for life insurance.

For example, suppose you’re a smoker or heavy drinker and have continued this behaviour despite knowing its health risks. In that case, you should disclose this information on your application. Failure to do so could result in a policy being denied or cancelled after death.

Death Due to High-Risk Activities

You must disclose this information when applying for life insurance if you engage in high-risk activities such as skydiving or racing cars. If you don’t and your death is caused by one of these activities, your beneficiary may not receive the payout they were expecting.

The same goes for high-risk jobs. You should disclose that you work in a high-risk occupation, such as law enforcement or firefighting. Failure to do so and you die due to the risks associated with your job, it’s likely that your beneficiary will not receive a payout.

Suicide

Many life insurance companies have a “suicide clause” in their policies. This clause states that if a life insurance policyholder commits suicide within a certain period (usually two years) of the policy being issued, the beneficiary may not receive a payout.

The reason for this is that many life insurance companies consider suicide to be premeditated and, therefore, not an accident.

But if a life insurance policyholder commits suicide after two years of having the policy, it is much more likely that the beneficiary will receive a payout.

How Long Does a Life Insurance Claim Take?

You should know that the claim process can take anywhere between 30 days to several months. The life insurance claims process can vary depending on the type of policy you have and how much time has elapsed since the death of your loved one.

It’s important to understand that if you are filing a claim for a policy that was in effect at the time of death, then your claim will likely be paid quickly, that is, within 30 days or so.

If you file a claim on behalf of someone who had a policy in place but did not pass away yet (such as a disability policy), it may take longer than 30 days for your claim to be processed and paid out.

That said, there are other factors that can affect the amount of time it takes for you to receive your life insurance payout, such as:

  • How quickly the insurance company receives all of the paperwork
  • If there are any issues with your claim, such as unpaid premiums
  • If the insurer is contesting your claim due to misinterpretation or other factors

It’s also worth noting that when dealing with life insurance companies, they might try to drag out their claims process to give themselves more time to investigate whether or not they believe your particular case is valid.

If this happens and you suspect that the company is trying to delay paying out your claim, you may want to consider hiring a lawyer specialising in this kind of thing. They can help speed things up while ensuring the insurance company doesn’t take advantage of you.

Summary

You may be eligible for a life insurance claim if you’re the beneficiary of a policy or the person who purchased it. However, there are many factors to consider when making an insurance claim, including how long you have had your policy and what type of insurance it is.

If you’re unsure whether to make a life insurance claim, speak to an insurance agent. Understanding the process and considering all the factors involved are important before moving forward.

Life Insurance Claims FAQs

What types of death are excluded from life insurance policies?

It all depends on the type of policy you’re looking at. Some policies won’t cover death caused by suicide, while others will only pay out if it’s accidental or involuntary.

For example, if the policyholder commits suicide and their life insurance provider finds out it was intentional, they might refuse to pay the claim (or reduce it).

Who receives a life insurance payout?

While any family member or friend can claim on a life insurance policy, the payout is usually given to the person named as the beneficiary.

This could be the policyholder’s partner, children, or even parents. The payout will be given to the next of kin if there’s no named beneficiary.

How much does life insurance payout?

It all depends on the type of policy you have. There are many types of life insurance, each with its payout limits and benefits.

These include:

1. Term life insurance: This type of policy only pays out if the insured person dies within a specified time period. It’s usually cheaper than other types of life insurance because it doesn’t pay out for any other reason.

2. Whole of life insurance: This type of policy pays out a lump sum if the insured person dies. The payout amount is based on a formula that factors in the insured person’s age and health status.

3. Critical illness insurance: This policy pays out a lump sum if the insured person is diagnosed with a severe illness, such as cancer or heart disease. It’s designed to provide financial support while they are ill and unable to work.