Life Insurance Claim Issues
I’m Katelyn Holub, an attorney focusing on personal injury law in northwest Indiana.
Welcome to Personal Injury Primer, where we break down the law into simple terms, provide legal tips, and discuss personal injury law topics.
Today’s question comes from a caller who is having difficulty collecting on a life insurance policy after the insured’s death.
Life insurance policies are designed to protect the people we leave behind.
When we buy life insurance, we realize that premiums have to be paid, but what happens if we become incapacitated and premiums do not get paid?
How do the survivors know what to do to make a benefit claim when we do die?
These are two separate but related issues, so let’s break them down.
An example will help.
Suppose you’ve been paying on life insurance for 20 years, and you faithfully keep up your premiums. But then you suffer a stroke and are in the hospital for three or four months, and you cannot communicate. If the premiums are not paid during that time, the policy may very well lapse. You have paid faithfully for insurance, hoping to protect the people you leave behind, only to now find that they have no clue that they must keep the policy paid up.
This situation happens more than you might think. Family members might look at a checkbook and find that checks have been written to an insurance company and track down that premiums must be paid. But where do they send the check?
If the family member is thinking clearly, they’ll see an attorney, and the attorney can help sort things out and get the premiums back on track.
Often there are grace periods of between three months to six months. So back premiums could be paid and the policy reinstated.
Suppose an insurance company denies a claim on the basis of a policy lapse. In that case, an attorney may be able to help you find a way to reinstate the policy and resubmit the claim.
Before making a claim, seeing an attorney and paying past-due premiums can be important.
The issue about survivors needing to know how to make a benefit claim is very similar.
Life insurance salespeople rarely tell you this, but it is up to you to anticipate what to do if you become incapacitated or die. If you become incapacitated, your beneficiary will have to figure out how to pay premiums. When you die, the beneficiary will have to file a claim.
The family members we leave behind often are not thinking about our life insurance situation. They may be emotional, and they may be stressed out.
To make the process easier for those we are trying to protect with the policy, create a file with a copy of the policy, insurance contact information, and copies of paperwork involved with filing a claim.
This file should include info about premiums that need to be paid and when premiums are due to be paid.
This file will be helpful for the beneficiary who needs to deal with the insurance company.
If the family member cannot figure things out on their own, they can bring this file to an attorney who will help them deal with the issues at hand.
I hope you found this information helpful. If you are a victim of someone’s carelessness, substandard medical care, a product defect, work injury, or another personal injury, please call (219) 736-9700 with your questions. You can also learn more about us by visiting our website at www.DavidHolubLaw.com – while there make sure you request a copy of our book “Fighting for Truth”.