The promise of life insurance is kept when you die and the tax-free death benefit goes to your intended beneficiary (or beneficiaries). The steps to making a claim can be taken by your executor or beneficiary. They may not have much experience but the process is straightforward and help is available.
1. Inform the insurance company promptly
Insurance companies don’t read the obituaries and send a cheque for the death benefit automatically. They must be informed. An insurer’s current contact information is easily available online. Having the policy number will help. If your insurance advisor has provided consistent ongoing service, he or she should also be contacted.
The insurance company may require that the claim request be submitted within a year of death. The insurance policy usually has the specifics. Exceptions may be made but you shouldn’t delay making a claim.
In the United States, some life insurance companies knew their clients died but didn’t notify the beneficiaries, according to a recent episode of 60 Minutes. Hopefully, this doesn’t happen in Canada.
2. Ask what to do
Insurance companies are good at paying legitimate death claims quickly. They keep refining their processes and forms. Getting the latest instruction directly from them or through your insurance advisor reduces frustration, prevents mistakes, and saves time.
3. Do what’s asked
Specific information must be provided, including a claim form and a death certificate.
There’s often more scrutiny during the first two policy years (called the contestability period). With complete information, claims can be paid within one to two weeks. Reviewing deaths that occurred outside Canada and the United States may take extra time.
That’s about it. The process is simple.
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