How Long Does It Take For Life Insurance to Pay Out?

Losing a loved one, no matter what the circumstances, is a heart wrenching time. Although no amount of money is going to bring them back, knowing that financially you are taken care off can go a long way to easing the pressure at that time. 

All claims will vary in the amount of time they take to complete but on average it takes around one month.

How soon do I need to let the insurance company know?

Generally there is no time limit on when you need to claim by.

Obviously the quicker that you do this the quicker you will receive your pay out but most insurers understand that this is a difficult time and that you need to do this at your own pace. You can inform them of the death via phone or post and some companies now allow you to do this online. 

What documents do I need when claiming?

When informing the insurance company of a death you will need the following – 

  • The name of the deceased.
  • The policy number. This can be found on the documents. 
  • The cause of death. 
  • You will also need a copy of the death certificate which can be obtained through the funeral directors. It is always advised to have a few copies. 

Once you have informed the insurers they will send you a claim form for you to complete.

Do remember that although any family member can inform them of the death, the beneficiaries will be specified on the policy document and sometimes also in the deceased’s Will.

How long will the process take?

All claims will vary in the amount of time they take to complete but on average it takes around one month.

Delays can occur if there are issues with the documents, if the cause of death needs to be investigated or if it is deemed that there was information that wasn’t disclosed to the insurance company that should have been. For example a pre existing medical condition wasn’t disclosed at the time of taking out the insurance policy. 

Are there times that the insurance company will not pay out?

In the past insurance companies have gotten some bad press however most insurance companies will pay out without any problems providing that everything is in order. There are some circumstances where there may be an issue. 

  • Many insurance will not pay out if the deceased had a pre existing medical condition and this is what caused them to pass away. This will be stated in the policy document at the time the policy was taken out. Failure to disclose pre existing medical conditions could render the insurance void.
  • Most insurance companies will not issue the life insurance if the deceased passed away from drug or alcohol misuse. 
  • Most insurance companies will not pay if the deceased died from sucicide. 
  • If the deceased has failed to disclose certain lifestyle habits, such as smoking or dangerous sports the insurance company may not accept the life insurance claim. 

What should I do if the insurance claim is denied? 

In the event that your claim for life insurance is denied then all insurance companies will have a disputes/complaints procedure which you should follow.

If after doing this the issue is still not rectified then you are fully entitled to take your case to the Financial Ombudsman Service. Here they will look at both sides of the case and decide whether the policyholders’ claim was unlawfully denied. If that is their ruling then they can enforce the insurance company to settle your claim. 

The most important thing for both the policyholder at the time of taking out their insurance and yourself as the one claiming, is to be honest and upfront with the insurance company to ensure that when the unfortunate time comes that the claim needs to be made, it is settled as quickly and as painlessly as possible. 

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