One of the most stressful things is dealing with a death, especially of a loved one and it doesn’t help that it comes with an element of administration. Life insurance is built to reduce the financial burden that is felt when a member of the family passes away, but in order to benefit from this financial windfall, a claim must be made. Life insurers know that complicated paperwork is the last thing anyone needs at this difficult time, and most have made their claims process as simple as possible to avoid adding burden to the grieving family.
The first thing to do, is make the insurer aware of the death. By telephone is the most common way but insurers are sympathetic in a time of grieving so most now have online claim forms. Before contacting them though, make sure that you have three things; the death certificate, the claim form and the policy document itself. They will need to see originals of all of the above so make sure that you send them via recorded or special delivery post to ensure safety.
In general, the payment of the sum assured will become part of the deceased’s estate. If this is the case then the proceeds will be subject to the general rules of probate, which in layman’s terms is a legal process which follows a death, with a purpose to confirm an executor’s validity to deal with an estate. What this means is that the life insurance payment will be distributed following the execution of the will.
If you are a policyholder or are considering taking out a life insurance policy and think your family would benefit from getting the money instantly in the event of your death, consider writing your life insurance policy into trust. Read here exactly what this and what this means.
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