The main benefit or purpose of a life insurance is not the health covers or the returns of the policy, the main purpose of a life insurance policy comes when insured passed away and the set of papers turns in to a valuable financial comfort to the family, the insured left behind. This short read focuses on how the life insurance death benefits payout works.
Do not consider life insurance policies as an investment product, instead consider as an investment for peace of mind
A recent encounter with a family of a deceased client made me write this article as the family needed assistance to get the life insurance death benefits realized, the widow of the client appreciated the decision made by her husband as she had to look after two daughters and a son and she said that she can continue to provide the lifestyle to the kids with the help of the life insurance benefits the family received.
We believe in life insurance and we request all our followers to obtain a well-planned life insurance policy from a reputed life insurance company, everyone should have a backup financial support and life insurance is not for you it’s for the family. Let’s look at the process of realizing the life insurance death benefits.
Life insurance Death benefits – the payout to the beneficiaries
Many of us know that life insurance death benefits are payable to the beneficiaries upon the death of the insured, but when it comes to realizing, the beneficiaries should follow few steps to receive it without any issues and delays.
The important factor in realizing the benefits is the reason for the death, there will be no other complication as long as the beneficiaries were clearly mentioned in the policy, unlike the property and cash, life insurance benefits can be enjoyed by the beneficiaries, thus the beneficiaries need to submit the certified copy of the death certificate to the insurance company and many companies pay the benefit within 30 to 60 days, also they have the right to ask for some additional information pertaining to the claim such as medical reports.
In case of a natural cause death
The life insurance company should be contacted as soon as possible following the death of the insured to begin the claims process. The certified true copy of death certificate and the policy document should be submitted to the life insurance company and most of the life insurance companies have a dedicated claim processing unit to assist the claim process.
In case of an accidental death
The same procedure to be followed, however, life insurance policies have an additional sum covered for accidental deaths thus the beneficiary is entitled to the total of normal death cover and accidental death cover.
In case of a suicide death
death benefits are payable only upon completion of specified period in the suicide clause, mostly 12 – 24 month from the date of the policy issuance, this can vary depends on the life insurance company and refer the policy document to find out the correct period.
Death due to a murder
The beneficiary should not be in the suspect list and he or she should be ruled out from the suspect list by the relevant authority, if the beneficiary is a suspect, the benefits will be held until charges are dropped by the relevant authority.
Two Year Contestability Clause
Most importantly, all life insurance claims are subject to the “Two year contestability clause”, the insurance company will investigate the death of the insured and the information provided in the original application to ensure there is no fraud committed, the claim is paid after the investigation as long as the insurance company is unable to prove that insured lied in the application. This may take several days and this clause is not valid after two years from the policy issued date.
Finally, do not consider life insurance policies as an investment product, instead consider as an investment for peace of mind, life insurance policy provides peace of mind to the insured and the loved ones’, the policy document is an important set of papers and we advise you to read through it at least once and try to understand and clarify the clauses to avoid confusions and conflicts, it will help the beneficiaries to provide accurate information when it comes to claims and realizing benefits.
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