How to claim on a life insurance policy after someone dies
When a loved one dies, you will want to minimise all the extra stress and planning that comes with organising a funeral and arranging the details and documents that are associated with the deceased’s will and estate.
You’ll also need to think about their life insurance policy and you’ll have to arrange the life insurance payout after their death.
In our guide on how to make a claim on a life insurance policy, we’ve answered some of the most frequently asked questions on the subject, including the process of claiming life insurance, who gets the payout and who the beneficiary of a life insurance policy is.
How do I claim a life insurance policy?
The life insurance claim process can sometimes be a little overwhelming if you’ve never done it before and alongside grieving for your loved one, you’re likely going to be a little overcome with the enormity of the situation.
Below, we’ve put together a brief rundown on how to make a claim on a life insurance policy.
First of all, you’ll need to think about what documents you’ll need to claim life insurance, which includes the name of the deceased, as well as their date of birth and home address, the cause of death (which you’ll find on the deceased's death certificate if you’re not sure of the exact medical cause), plus their life insurance policy number. You may also need to submit information about who you are and your relationship to the deceased.
Once you’ve filled out this information online or presented it to a representative of the relevant insurance company over the phone, they will then send out a claim form for you to fill out and a list of all the documents they’ll need in order to process your claim,such as a copy of the death certificate.
The beneficiary of the life insurance policy doesn’t necessarily have to be the one to fill out the claim, but they are the only ones who are able to receive a payout.
The beneficiary of the deceased is usually their surviving spouse or civil partner, but if the policy was set up in a trust, then the beneficiary will likely be the nominated person in that trust.
If a beneficiary hasn’t been specified on a policy then a court will have to name one, but this will likely delay the claims process. In the event that there is a dispute about who receives the payout, then you might want to seek legal advice in order to help you out with your claim.
How long does it take to process a life insurance claim?
The processing of a life insurance claim can take as little as a few days up to a few months, depending on the circumstances of the claim.
If all the correct documents are in place and there are no issues or disputes over the beneficiaries, then the claim will usually be processed within one month.
On the other hand, if the cause of death is unclear and needs to be investigated, this will cause delays in payouts of the life insurance claim until the cause of death is made clear.
How long do you have to claim life insurance?
There isn’t usually a specific time frame in which you need to claim a life insurance policy, so if you’re particularly struggling after the death of a loved one, you don’t need to worry about rushing to make a claim.
Bear in mind, however, that some life insurers will set a time frame of 2 years after the policyholder's death.
Naturally, the sooner you make a claim, the quicker you will receive the payout and this can be used for things such as paying for the deceased’s funeral.
What happens when the life insurance policyholder dies?
Once the owner of a life insurance policy dies, it is the duty of the beneficiaries to then begin the claiming process for the payout.
They will usually be paid a lump sum of money as a payout from the life insurance policy.
What happens if I have a joint life insurance policy?
If you have a joint life insurance policy with your partner and one person dies, a lump sum of money is typically paid to the surviving partner and the policy will end. This means that the surviving partner will no longer have a life insurance policy in place and will perhaps want to seek out another policy so that they’re covered (as well as their loved ones and children).
In the event that both parties of the joint policy die at the same time, the policy will be paid out to the beneficiaries as stated in the policy.
Is life insurance part of an estate after death in the UK?
In the UK, life insurance is usually considered to be part of the deceased’s estate upon their death. However, you can avoid this happening by writing your policy ‘in trust’ which means the sum will not form part of the estate for Inheritance Tax (IHT) purposes.
What happens if my life insurance claim is rejected?
While it’s not very often that life insurance claims get rejected, it does still sometimes happen.
The rejection of a life insurance claim can happen for several different reasons, including:
- If the policy term ended and you didn’t realise when you made the claim.
- If the cause of death is not covered under the policy - some life insurance policies won’t cover for things like suicide (in the first years of setting it up), death caused by drugs or alcohol or reckless behaviour.
- If you didn’t supply the correct information when making the claim (this might have been done by accident, but it can still cause a claim to be rejected).
If your life insurance claim has been rejected then you can get in touch with the Financial Ombudsman if you don’t believe that your claim should have been denied.
Read our guide on why life insurance payouts are usually denied.
Can I make a claim on my life insurance policy before I die?
While you can’t claim on your life insurance policy before you die under regular circumstances, if you have critical illness cover then you might be able to get a payout early if you’ve been diagnosed with a terminal illness that is specified in your policy.