How to make a life insurance claim

First, identify the life insurance company involved. Look through your loved one's financial records, contact past employers, or ask the financial advisor for clues if you cannot locate the policy. The Illinois Department of Insurance offers a policy-locator service as well.

Next, contact the insurer or local agent to verify the status of the life insurance policy. Coverage must be in force on the day your loved one died to proceed with a claim. Term insurance, for example, is in effect for a specific number of years. There is no payout if the insured dies after the policy term ends. A permanent policy does not expire, but could be canceled for nonpayment or benefits may be reduced to pay an outstanding loan.

Ask the insurance representative for guidance about the claim process. A death certificate and company-specific claim form are often necessary. The death record must be certified. Most claim forms ask for identifying information on the beneficiary and deceased individual, as well as payout preference. Insurers may offer lump sum, installment, or annuity payout options depending on the amount of the benefit.

A policy in force less than two years is subject to the contestable clause. The insurer may investigate, and dispute the claim if the company finds a misrepresentation on the application.

Life insurance claims are usually processed quickly. When problems arise, they are typically related to outstanding paperwork, a canceled policy, an investigation related to the contestable clause, or in cases of fraud.