Want to ensure your life insurance claim goes smoothly? Find out the correct procedure to follow and what documentation is required.
Making a claim is an important process that both policyholders and beneficiaries of a life insurance policy should understand. Whether you are about to make a claim or are making sure that your next of kin is familiar with the claims process, here are some simple steps to remember.
- Notify your insurer or your life insurance adviser. This is where your insurer will let you know what types of forms and documentation is required.
- Your claim is assessed. Once you provide whats needed, your claim will be assessed. Some insurers will have a dedicated claims assessor to keep you updated and ask for any additional details.
- Get to an outcome. You'll either receive a payment or be rejected e.g. non-disclosure of a pre-existing medical condition at the time of application.
Note: If you're claim is for an ongoing income protection payment, may need to maintain your policy by updating your insurer with your health status.
Steps to a successful claim
Key tips for claimants
Making a claim on a life insurance policy is not necessarily a complicated procedure but it can be time consuming if the appropriate steps are not taken. Bear in mind that the claims procedure may differ from one provider to the other. However, you can manage this process more efficiently by taking some key considerations into account when making a life insurance claim. These include:
- Check the life insurance policy documentation: Life insurance policies and procedures can vary between providers, so before you do anything else relating to the life insurance plan, you need to check the policy document carefully. This is to make sure that you are aware of the process that you need to go through and that you have all of the relevant information that the provider is likely to ask for on hand. Have a clear understanding of the claims procedure when you first apply for the policy and store all the necessary documentation in a safe place.
- Contact the insurance provider as soon as possible: to notify them of your intention to claim. While there may be a lot of other things going on in your life that you need to get sorted, it is critical to begin organising the claim as soon as possible to ensure the payment runs smoothly.
- Keep a detailed record of your calls and contact: Because life insurance claims can take a considerable amount of time to process, it is all too easy to forget details that may prove important later on during the claim process. You may have to contact the life insurance provider on a number of occasions by phone, in writing, by email etc. Make sure that you keep notes of when you made contact, names of people you spoke to, copies of any letters and correspondence that you send in, etc. Keep all of these in a safe place so that you know exactly where to go should you need to refer back to them.
- Be organised and get all the required documents ready as soon as you can to start lodging in your claim: The insurance provider will require different types of documentation and they are normally specified in the policy documentation, but you can also contact the provider for verification. This can include things such as a copy of the death certificate and details about the policyholder’s doctor/surgeon. Being organised is absolutely essential or you experience delays in receiving your benefits.
Read finder's consumer guide to claiming and finding quality cover
Some key questions you might have about submitting a claim
Life Insurance Claims and Taxes
It is important to remember that life insurance benefit payout is not taxable at the time of a claim, if the nominated beneficiaries are financially dependent on you. These generally include:
- Spouse/partner;
- Child/ren under the age of 18;
- Other financial dependents, such as siblings or ageing parents.
If you have nominated specific individuals as the benefactor of your life insurance policy and they are not financially dependent on you, there may be some tax implications.
Be prepared and save time when claiming life insurance
At a time of grief the last thing that most people want to be doing is getting stressed about making a life insurance claim. At the same time, for many people this is a necessity that needs to be sorted out as quickly as possible to avoid financial hardship in the short-term.
Being prepared can save a lot of time when it comes to making a claim on a life insurance policy. This preparation can mean everything from going through the claim procedure with the policyholder when the policy is first taken out to ensuring that you always know where you keep the policy documents in case you ever need to get hold of them and the policyholder is no longer around. Simple things like these can help you to save time and hassle when it comes to actually making a claim on a life insurance policy making it easier to cope with the loss of a loved one.
