How to Collect on a Life Insurance Policy

You’re the beneficiary of an insurance policy and you’ve just become eligible to collect, so now what do you do? Our team at LSM Insurance will walk you through the process step by step — right here, right now.

1 Try to obtain all of the insured’s policies. While it is not necessary to have a copy of the policy for the plan to pay out, it is useful, because the policy itself will highlight the plan’s death benefit along with any possible exclusions. The insured may have multiple policies. For example, they could have two or three individual life insurance policies with different insurance carriers, such as a group life policy, a mortgage life policy, or another type of creditor life insurance policy.

2. Contact your insurance adviser or insurance company. The insurance company must be informed of the insured’s death, otherwise they will not process the claim. It is estimated that millions of dollars in life insurance go unclaimed and unpaid every year in Canada. This is because the insurance companies in question were never informed that their insureds passed away. One of the advantages of working with an insurance broker or agent versus buying a life insurance policy directly from an insurance company is that the advisor can help you with the claims process, so you don’t become a statistic and this never happens to you.

3. Collect all the required documents. The insurance company will need an original or certified copy of the death certificate. The beneficiary or beneficiaries will also need to fill out a claimant’s form and provide proof of identity in the form of a birth certificate, driver’s license, passport, or other piece of identification. It’s also a good idea to keep a copy of everything you send in. For larger policies, or for policies in which the insured passed away within the first two policy years, the insurance company may write to the insured’s doctor to further verify their information at the time of application. Smaller life insurance policies (plans valued at $25,000 and under) may qualify for an express payment, which can be paid out within five business days. The documents can be sent directly to the insurance company, or they can be forwarded to the company through your insurance broker or agent.

LSM Insurance works with over 15 different insurance carriers and has vast experience in assisting clients with the claims-paying process through each of the largest carriers in Canada.