Minnesota Life Insurance Lawyer

How Do I Collect Life Insurance When A Loved One Passes?

The passing of a loved one can leave significant issues to deal with, from funeral plans to dealing with the estate. The technical requirements of doing so can be one burden, while the financial costs can pose another burden.

If your loved one had a life insurance policy, this can often be a simple process to collect and provide money to take care of your loved one’s estate, as well as help fill in for the immediate loss of your loved one. Life insurance benefits are usually paid when the insured person has died, and the beneficiaries file a death claim with the insurance company.

To file a claim on life insurance, contact the life insurance company as soon as possible after the death of the insured to begin the claims process. The claims representative will request paperwork to process the claim and provide you with the information you need to know.

The insurance policy beneficiary must obtain a certified copy of the death certificate. Once the claim is filed, the review can take some time, as most insurers are allowed a period to review the claim. However, most claims are decided in 30 days or less.

Minnesota Life Insurance Policy

Once approved, you can plan to see the benefits of the life insurance policy shortly thereafter. These funds are immediately available to the beneficiary, without having to wait for the estate to be probated.

Payment of the funds can be by lump sum, installment-payout, or annuity. While most policies traditionally payout upon the policy holder’s death, some policies enable the policyholder to be the beneficiary of their own life insurance policy in the event of a terminal or chronic illness.

All life insurance proceeds that are paid out are essentially non-taxable. If your spouse is the beneficiary, the assets are non-taxable. However, if you leave the life insurance to anyone else, including your children, the proceeds will be considered in your estate for tax purposes, which only becomes an issue if your estate value is more than the federal or state levels for tax.

The only potential hang ups you may find in the process are when there are concerns of fraud. This may arise if the loved one passed soon after obtaining the policy, or if the cause of death of the loved one is at issue or a concern to the life insurance company.

In such an event, a beneficiary should be aware of their rights and the appeal process for the company. In addition, the state attorney general’s office can often be a good resource for ensuring proper payout of life insurance benefits. If you have questions or concerns on receiving pay out of a life insurance policy, please call our office where you can speak with a probate attorney on the matter.