Is There a Time Limit for Collecting on a Life Insurance Policy?
When you purchase a life insurance policy, you expect that your beneficiaries will be able to claim the death benefit. Historically, life insurance companies have been very good about paying life insurance claims. Life insurance companies often employ sophisticated computer programs to keep track of all financial data and to make sure that claims can be paid when death claims are submitted. However, you should know and understand the process and whether there is a time limit on making a claim.
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Death of the Insured
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It's tragic when a loved one dies and a life insurance policy death benefit needs to be claimed. However, insurance companies are in the business of providing money for just such an occasion. When an insured person named on a life insurance policy dies, the policy immediately terminates on the date of his death.
The Death Certificate & Claim Form
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You need to bring a copy of the death certificate to a branch office, or mail it to the home office along with a claim form (which can be obtained from your life insurance agent or the insurance company home office). The claim form and the death certificate will allow the insurance company to process the claim.
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Submitting Paperwork to the Insurance Company
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Paperwork submitted to the insurance company needs to be accurate and all forms need to be filled out completely. The main reason a death benefit claim would be denied is if the beneficiary does not properly fill out the correct forms.
Collecting the Death Benefit
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Once all forms have been filled out, the death benefit can be collected. Insurance companies generally mail a check to the beneficiary or beneficiaries. It is then the responsibility of the beneficiaries to cash the check and manage the money. Sometimes, life insurance companies will provide periodic payments to beneficiaries and manage the money on behalf of the beneficiary.
Misconceptions
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One common misconception is that there is a time limit on claiming a death benefit. This is generally not true. As long as you can provide proof of death of the insured and fill out the claim form to receive the death benefit proceeds, there is no time limit on filing for death benefits. The insurance company must pay you what is stipulated in the contract provided all premiums were paid and the policy was in force when the insured died.
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