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How to make a life insurance claim

If a loved one has passed away, you may now be faced with making a claim on their life insurance policy. The process is fairly straightforward but may not be obvious, so we’ll cover the steps here in some detail.

Remember that it’s your responsibility to notify the life insurance company and provide the relevant paperwork. The life insurance company will not normally have any knowledge of the passing of the insured.

Steps to complete a life insurance claim:

  1. Obtain the policy or policy certificate if possible. Having the original policy contract will help in a variety of things, not the least of which is the policy number. In addition, if you have the policy, the insurance company may request it’s return now that the contract is to be fulfilled. Please remember that if you do return the policy before receiving any benefits that you should make a complete copy of it. This will assist you should the insurance company challenge your claim.
  2. Determine if it’s an individual policy or if it’s a group/association/work policy. In the case of an individual policy you should contact the life insurance agent or broker. If it’s a life insurance policy from work, an association, or other type of group life insurance policy (i.e. Benefits) then you should contact the appropriate association. If they are unknown or if they are unavailable can contact the insurance company’s claim department directly, however you may find your agent or broker or HR department easier to deal with in facilitating the paperwork.
  3. Obtain the necessary forms from the broker or insurance company, complete and return to them. There are normally three forms required for a life insurance claim. These forms are detailed in steps 4-6.
  4. Claims form. Your first form will be completed normally by you. This is just a basic claims form and serves to outline the claim by the beneficiary. It will require general information about the insurance policy and the insured.
  5. Certificate of death. This official form is normally available from the funeral home that handled the deceased’s final services. They are likely expecting your request and will normally have copies readily available. There may be a nominal fee for providing this certificate.
  6. Doctor’s report. There will also be a detailed form to be completed by the attending physician or hospital. This form is often a provincial standard, and again the doctor is normally expecting this request. There will likely be a nominal fee for completing this form. To get it completed, simply contact either the attending physician or hospital where the deceased passed away and they should be able to provide further details.

These three completed forms are then provided to the life insurance company at which point they will process the claim

Timeframe:

How long does it take to pay a life insurance claim? There’s two answers to this, either very fast, or very delayed.

If the claim is smaller or it’s been in force for longer than approximately five years you can expect the policy to be paid almost immediately. Even large 7-figure claims are paid quickly if the company is not doing a review on the claim. While the events surrounding the claim are tragic, life insurance companies see this as an opportunity to really shine and will take steps to make the process fast.

If the policy is less than five years old (and almost certainly if it’s less than two years old) or there’s anything of concern with the claim, the timeframe changes from almost immediately to 4-6 months. In those situations life insurance companies will frequently review the claim. In these reviews the life insurance company will order reports from the provincial health plan, effectively getting a list of doctors that the insured may have seen for years prior to their passing. They will then often need to interact with these doctors to get more detailed reports. The request from the province alone will frequently take 90 days and followup reports from doctors will further add to the delay. These requests for reports will take most of the time for the review, whereas the actual review itself may be as short as a few days to a couple of weeks. However you should be prepared for an approximate 4 month wait if the claim is being reviewed by the insurance company. Once the claim is reviewed to the insurance company’s satisfaction, again you should expect the actual claim payment to be expedited and paid within a few days.

Surprisingly, the life insurance companies will frequently simply mail the cheque by regular post. In my case, where physically possible (if insurance company and beneficiary are both in Ontario) I prefer to pick up the cheque myself directly from the head office of the life insurance company and immediately drive it same day to the beneficiary. Where this isn’t possible, I will attempt to pick up the cheque from the insurance company and then overnight courier the cheque to the beneficiary. Doing so can take another few days off of the process and is simply an added service that we like to provide our clients.

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