How to make a life insurance claim

Making a life-insurance claim can be daunting, particularly given the grief and loss that accompanies the death of a loved one. This three-step guide will help you navigate the process more easily and answer other questions you may have about it.

Making a life-insurance claim can be daunting, particularly given the grief and loss that accompanies the death of a loved one. This three-step guide will help you navigate the process more easily and answer other questions you may have about it.

Debbie Thompson
Life insurance expert
7
minute read
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Posted 18 MAY 2021

Three steps for making a life-insurance claim

When someone you love dies, making a life-insurance claim may feel like more admin you’d rather not have to deal with.

If the policy was active when the person insured died, you won’t have a deadline to worry about, but it’s advisable to claim on the life insurance policy sooner rather than later. If no claim has been made after a number of years, the policy may be passed on to the Unclaimed Assets Registrar (UAR).

Most good life-insurance providers are also well versed in supporting you through the process, with considerate staff who regularly deal with people who are grieving. Their policies are also designed to make claiming and receiving pay-outs as quick and uncomplicated as possible.

When you are ready to put the wheels in motion, here’s how to make a life-insurance claim.

1. Find the relevant documents

You need to know which insurance provider to contact. Their details will be included in the life-insurance policy or on the provider’s website. If you can’t find the relevant paperwork, you might get the information you’re looking for from the deceased’s bank statements.

You’ll need the policy document to make a claim. If you don’t have it, the Association of British Insurers (ABI) may be able to help you, or try the UAR.

Alternatively, you might have a name for the provider, but not be able to find any current contact details. Because life-insurance policies are often taken out many years before a person dies, the provider might have changed their name or been taken over by another company. Again, the ABI can be your first port of call or try the Policy Detective website or the Association of Financial Mutuals.

2. Contact the life insurance provider

Get in touch with the provider to let them know you’re planning to make a claim. At this point, they’ll need:

  • The name of the deceased
  • The cause of death (shown on the back of the death certificate)
  • The life insurance policy number
  • Your details and relationship to the deceased

Anyone can start the claim process, but pay-outs will only go to the beneficiaries – those specifically chosen by the deceased and named in the life-insurance policy and/or will.

According to UK law, anyone taking out life insurance must name at least one beneficiary.

3. Make a claim

There are many different types of life insurance. However, most require the following three documents as a minimum if you want to make a claim.

The death certificate. You’ll get a certified copy from the funeral director when you register the death. If you’re dealing with more than one life-insurance policy, ask for multiple copies. For a fee, you can also get copies from the General Register Offices, via gov.uk.

If the death is referred to a coroner and an inquest opened, you could be given an interim death certificate. Although the insurance provider may accept this, they will usually need more information before they can assess the claim.

The claim form. You’ll get this from the life-insurance provider themselves or their website. Make sure you fill it out accurately to avoid any delays in payment.

The life-insurance policy document. The insurance provider will need the original document, so if you’re posting it, it’s wise to use recorded or registered delivery to make sure it doesn’t get lost.

The insurance provider may also need to see medical information from a GP or specialist.

How to claim life insurance through an employer

If life insurance was included in your loved one’s employment package, it’s known as death in service cover. The benefits only apply if they were still on the company payroll when they died, and policy details are likely to vary depending on the provider.

Once you’ve notified the employer of the death, in many cases the money to be paid out will go into a trust, which usually protects it from inheritance tax. Payments will be made from the trust and the trustees decide who the money goes to, although the policy holder can specify their chosen beneficiaries in an ‘expression of wish’ form.

You can also write a ‘nomination of benefit’ letter to let the trustees know who you’d like the money to go, but they have the final say.

Frequently asked questions

How long will payment for a life-insurance claim take?

It depends on the insurance provider, but once they’ve agreed to pay the claim and have everything they need, you may receive payment within five working days, but it could take much longer.

If there are delays, it’s likely to be down to a dispute or uncertainty over who the beneficiaries are.

Why might a life-insurance claim be refused?

Although it doesn’t happen often, insurance providers may refuse to pay out. This can be due to one of several different reasons.

  • Misrepresentation – when the person applying for the cover hasn’t been honest or has withheld information on their application form – for example, not sharing details of a pre-existing medical condition.
  • Missing documentation – if you haven’t got any of the documents required to make a claim, the ABI or UAR may be able to help you.
  • Suicide – many insurance providers won’t pay out if the policy holder commits suicide within 12-24 months of taking out cover, but they may honour the contract after that time.
  • Death from drug/alcohol abuse – which is likely to be excluded from many life insurance policies.
  • A lapsed policy – if the policy-holder has not maintained their monthly payments.
  • Death caused by a high-risk activity – for example, extreme sports, which may be excluded within the terms of the policy.
  • A claim is made too soon after the start of the policy – there’s usually a fixed period of time that needs to have passed before a claim can be made on a policy. This varies depending on the provider.
  • The policy term has ended – level-term life-insurance policies pay out a fixed amount of money for a fixed period of time, chosen when the cover was bought. If your loved one died within that time frame, the policy will pay out. If they didn’t, it won’t. For example, a 40-year policy taken out by a 30-year-old will cover them until they’re 70, but no older.

Always read the life-insurance policy document carefully before making a claim. If you disagree with the handling of a life insurance policy and have complained to the insurance provider and are still not happy, you can make a complaint to the Financial Ombudsman.

What happens if no beneficiary has been specified?

Anyone taking out life insurance must include at least one beneficiary according to UK law. However, if there’s no named beneficiary, the life insurance pay-out will usually go into the deceased’s estate. This includes everything they own at the time of their death, from property to jewellery.

The life-insurance pay-out will then be subject to the rules of probate, the legal process that follows a death, and the money will only be released after the will has been executed.

If the will doesn’t specify a beneficiary or there’s no will, a court will have to name a beneficiary. This complicates the claims process and may also lead to disputes. If you find yourself in this situation, it’s wise to seek legal advice and maybe representation.

Usually the beneficiaries of a policy are clear. With joint policies, the person receiving the payment will be the other person named on the policy, and then the policy ends. In the case of single policies, the money will usually go to the deceased’s husband, wife or civil partner if they’re still alive, or the named beneficiary.

What difference does a life insurance policy in trust make?

According to current tax laws, a life-insurance policy written in trust isn’t usually included in the total value of your loved one’s estate, unlike a conventional policy. This means it won’t be subject to the 40% inheritance tax that is applied to the value of any estate worth more than £325,000.

Life-insurance policies written in trust also tend to streamline the pay-out process. All that’s needed to claim is the death certificate and, because the money is sent directly to the beneficiaries, if can speed up the time it takes to receive the pay-out.

Can I make a life-insurance claim before I die?

Usually payment is only made following death. However, many life insurance policies include terminal illness cover and will pay out early if the policy-holder has been given a terminal diagnosis, which means they are expected to die in the near future – usually six to 12 months. This can help cover mounting healthcare bills or end-of-life care.

This is different from critical illness cover, which pays out a lump sum or ongoing payments when the policy holder is diagnosed with an illness that may not result in death.

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