Life insurance is designed to reduce financial burden
Coping with the death of a loved one is undoubtedly one of the most stressful things any of us will have to go through in our lifetimes.
Life insurance is designed to reduce the financial burden that is felt when a member of the family passes away, but in order to benefit from this financial windfall, a claim must be made.
Most insurers understand that complicated paperwork is the last thing anyone needs at this difficult time and they have made their claims process pretty straightforward. Some now offer online claim forms too.
The standard claims process
Claims processes can vary from one insurer to another, but as a general rule they all follow the same clear steps to making a claim:
- Contact the insurance provider to make them aware you want to make a claim
- Receive the claim pack in the post or by email
- Fill in the required details and provide required documentation – (Death certificate, claim form, policy document)
- The insurer usually requires original copies of these documents, so send it by registered post to avoid any losses
- Receive payment either directly or as part of the deceased’s estate.
When to claim and who to contact?
- It is important to notify your insurer as soon as you can in order to start the claims process quickly
- The longer you leave it to get in touch, the longer you’ll have to wait for a pay out
- You can find the contact details of your insurance provider on your policy documents, as well as their website
- Some insurers now provide an online claims form, meaning you might not have to even speak to anyone in order to get your claim started.
How long before you receive payment?
- The time it takes between making a claim and receiving payment will depend on the way the insurance was arranged
- If the insurance belonged to the deceased, then the sum insured with become part of their estate, and as such will be subject to probate
- This means that any life insurance payment will only be distributed once the executor’s capabilities have been confirmed, and the will has been executed
- Usually the insurance company are prompt at paying out, but the process of going through probate can lengthen the time it takes to receive funds
- If there is no will left by the deceased, this process can take longer
- If the value of the estate exceeds £325,000, you could end up paying 40% tax on all or part of the life insurance lump sum under inheritance tax
- The best way to speed up the time it takes to receive life insurance payments, and to avoid paying a large amount of tax, is to have the policy written into trust
- This means that the recipient will be the legal owner of the money, but that it is held in trust by the insurance company, until such time as the policyholder passes away
- The policyholder needs to write the policy into trust and this cannot be changed once they have died.
Talk to one of our friendly Reassured consultants today on 0808 168 2025 to find out how life insurance could work for you and your family. Alternatively Start Your Quote online today.