The companies will search their records to determine whether they have life policies or annuity contracts and will contact you directly only if they find a policy in the name of the deceased and you are the designated beneficiary or authorized legal representative.
Once a policyholder has passed away, beneficiaries typically receive life insurance notification within 90 days of the death. However, this can vary depending on the insurer, and whether they're able to locate all beneficiaries.
Life insurance companies typically do not know when a policyholder dies until they are informed of his or her death, usually by the policy's beneficiary. Even if a policy is in a premium-paying stage and the payments stop, the insurance company has no reason to assume that the insured has died.
Contact your insurer
As uncomfortable as it may be, as a relative, spouse, or executor of the estate, you need to let the insurance company know that a or the sole policyholder has passed. Most companies give you about 30 days to do this, and many accept a phone call as notification.
Many life insurance companies try to contact beneficiaries if the beneficiaries don't contact them first. The “catch” is that there's no automatic process that tells them about policyholder deaths.
The timeline is much shorter. California laws, for example, require that beneficiaries are notified within 60 days of the death.
While every company's process varies somewhat, you'll basically have to fill out a claims form called a “Request for Benefits” and provide a copy of the death certificate. If you are in touch with the insured's insurance agent, they can help you through the claims process.
The easiest way to learn if you are a life insurance beneficiary is to talk to the policyholder if they are still alive. They can tell you whether you're a beneficiary and provide information necessary to claim the death benefit when they pass away.
If the executor is not informing beneficiaries about the estate or is withholding certain documents, an experienced probate lawyer can help beneficiaries bring a claim to try to force the executor to provide them with the information they're seeking.
What is the average life insurance payout? Not all life insurance payouts are created equal, and may depend on several factors covered below. On average, however, a typical life insurance payout in the U.S. is about $168,000.
A will cannot override a beneficiary designation because the policy is a contract between the person who purchases it and the issuer. The only way anyone can override a beneficiary other than the policyholder is if a court determines there's a conflict between named beneficiaries and state laws.
A copy of a death certificate for the deceased beneficiary is required. If there is no surviving beneficiary, terms of the policy or contract will determine who is entitled to the benefits.
Typically, you might receive a certified letter from the personal representative notifying you that you are a beneficiary. However, you can always contact the estate attorney to explain the will to you.
Death Occurs Shortly After Purchase of the Policy: While a death that occurs soon after the purchase of a life insurance policy can simply be the product of coincidence, insurance companies will investigate closely under these circumstances. The insurance company will be on the lookout for potential foul play or fraud.
Regardless of whether you're named as a beneficiary on the life insurance policy, you should notify the insurer of your loved one's death as soon as possible. Making sure the insurer is aware of the deceased's passing can help the process of identifying the policy's beneficiaries to go smoothly.
Life insurers typically take 14 to 60 days to pay out the death benefit after the beneficiary files the claim. This is because they must verify the policy terms and policyholder's death certificate and confirm who the beneficiaries are.
Note that the 30-days starts only when all the relevant documents related to the proof of death of the deceased policyholder have been submitted by the claimants. However, death claims that require to be investigated to confirm their legitimacy, can take up to 90 days to settle.
A typical timeline
While there is no strict deadline, beneficiaries are usually notified within a few weeks to a few months after someone's death.
When distribution is expected: Executors typically contact beneficiaries when the distribution of assets is imminent. This ensures that beneficiaries are prepared to receive their inheritance and can provide any necessary information, such as bank account details, for the transfer of assets.
Tell friends and family and employer
Inform neighbors, coworkers and the members of any social groups or church the person belonged to. Ask the recipients to spread the word by notifying others connected to the deceased.
Following the death of a worker beneficiary or other insured worker,1 Social Security makes a lump-sum death benefit payment of $255 to the eligible surviving spouse or, if there is no spouse, to eligible surviving dependent children.
An executor/administrator of an estate can only withdraw money from a deceased person's bank account if the account does not have a designated beneficiary or joint owner and is not being disposed of by the deceased person's trust.
In many traditions, there is a belief that the soul lingers on Earth for 40 days, engaging in a journey of purification, judgment, or preparation for its ultimate destination, which may be reincarnation, heaven, or another form of afterlife.