How to claim life insurance
Making a life insurance claim can be daunting, particularly when dealing with grief and loss after the death of a loved one. But don’t worry, there’s no time limit on when you have to claim, so you can wait until you feel ready.
Our guide will help make the process easier and answer any questions you might have about life insurance beneficiaries and pay outs.
Making a life insurance claim can be daunting, particularly when dealing with grief and loss after the death of a loved one. But don’t worry, there’s no time limit on when you have to claim, so you can wait until you feel ready.
Our guide will help make the process easier and answer any questions you might have about life insurance beneficiaries and pay outs.
Four steps to claim life insurance
When someone you love dies, making a life insurance claim may feel like more admin you just can’t face, on top of all the funeral arrangements and sorting out their estate.
Thankfully, most life insurance providers can support you through the process, with considerate staff who are used to dealing 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’re ready to put the wheels in motion, here’s our step-by-step guide on how to make a life insurance claim.
Step 1. Find out which life insurance provider holds the policy
First, you need to know which insurance provider to contact.
In a world where life insurance policies may have been arranged years before, and companies can change their names or get taken over, this can be easier said than done.
If you have a copy of the life insurance policy, it should include their details.
If the contact details are out of date, the Association of British Insurers (ABI) has a list of current contact details for its members.
If the insurance provider no longer exists, Policy Detective can help you figure out who holds the policy now. Meanwhile, if the policy was taken out a while ago with a friendly society or financial mutual, the Association of Financial Mutuals may also be able to help you track it down.
If you think your loved one had life insurance but you can’t find any paperwork, you many need to turn detective. Go through their bank and credit card statements to see if you can find regular payments to a life insurance provider.
Step 2. Gather the documents you need to make a life insurance claim
There are many different types of life insurance and different policies will have different requirements. However, most will require the following documents to make a claim:
The death certificate
You’ll get a certified copy from the registrar when you register the death. It makes sense to ask for a handful of copies so you can send several off at the same time to different organisations, rather than waiting for a single copy to be returned. You can also get copies from the General Register Offices, via GOV.UK for a fee.
If the death is referred to a coroner and an inquest is 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 life insurance policy document
If you can’t find the original policy document, ask the life insurance provider how to proceed.
Medical information
The insurance provider may also need to see medical information from a GP or specialist.
Step 3. Contact the life insurance provider
Once you have all the information needed to hand, contact the life insurance provider to let them know you’re planning to make a claim. Nowadays, many claims can be started online.
At this point, they’ll need to know:
- The name of the deceased
- The cause and date of death (shown on the back of the death certificate)
- The life insurance policy number
- Your details and relationship to the deceased.
They may also ask if the deceased wrote a will, and if they left behind a spouse or any children.
Step 4. File a life insurance claim
To file a life insurance claim, you’ll need to fill out the insurance provider’s claim form and provide any documents needed to support your claim. The life insurance provider may send you a claim form or you may be able to download one from their website. Make sure you fill it out accurately to avoid any delays in payment.
You’ll normally need to send the original death certificate and, if possible, the original policy document, so it’s a good idea to use recorded or registered delivery, to make sure it doesn’t get lost.
The insurance provider will notify you when they have made their decision or if they need further information or evidence.
How to claim life insurance through an employer
If your loved one was employed when they died, they may have had life insurance as part of their job, known as death in service cover. The benefits only apply if they were still on the company payroll, and details are likely to vary depending on the provider.
Once you’ve notified the employer of the death, the pay out will normally go into a trust, which should protect it from inheritance tax.
The person who died will have hopefully filled out an ‘expression of wish’ form or written a ‘nomination of benefit’ letter, saying who they would like to receive the money.
The trustees have the final say about where the money goes, but they usually follow the deceased’s wishes.
The trustees also have the discretion to pay a relative or dependent if the form hasn’t been completed or if circumstances have changed - for example if the person nominated has also died.
Who can make a life insurance claim?
Anyone can start the life insurance 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.
When do I need to make a life insurance claim?
There’s no time limit to claim on life insurance, so you can take as long as you need before starting the process. If the policy was active when the person insured died, you won’t have a deadline to consider, but it’s a good idea to claim sooner rather than later.
How long does life insurance take to pay out?
Life insurance claims are often settled within 30 days, and sometimes within as little as five working days, provided the insurance provider has agreed to pay the claim and has everything they need.
However, it does depend on the life insurance company and the specifics of the claim.
The pay out could take longer if, for example, there’s any missing paperwork, a dispute over the validity of the claim or uncertainty about who the beneficiaries are.
Reasons you might be refused
Although more than 97% of life insurance claims are successful, according to the Association of British Insurers, there are occasions when insurance providers may refuse to pay out.
- 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, you may be able to use an unclaimed assets tracking service, normally for a fee, to help you source the paperwork you need.
- Suicide – if the cause of death is declared as suicide, life insurance may not pay out or there may be conditions. Many insurance providers won’t pay out if the policy holder commits suicide within 12 to 24 months of taking out cover, but they may honour the contract after that time.
- Death from drug/alcohol abuse – this is likely to be excluded from many life insurance policies.
- A lapsed policy – if the policyholder has not kept up their monthly payments.
- Death caused by a high-risk activity – for example, extreme sports or even provoking a fight, which may be excluded by the small print in 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 – some life insurance policies, known as ‘term’ insurance as opposed to ‘whole of life’, only pay out if your loved one dies during a set period of time, chosen when the cover was arranged. If they died within that time frame, the policy will pay out. If they didn’t, it won’t. For example, a 25-year policy taken out by a 30-year-old to cover their mortgage will only cover them until they’re 55, but no longer.
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 but are still not happy, you can make a complaint to the Financial Ombudsman.
How do I know if I’m a life insurance beneficiary?
You may not realise you’re a life insurance beneficiary if your relative or loved one didn’t tell you they were taking out a life insurance policy and naming you as a beneficiary. If you find a life insurance policy document among the deceased’s paperwork, contact the insurance provider and they’ll be able to clarify if the policy was still running and who is named as the beneficiary.
If you suspect a loved one had an insurance policy but you haven’t found any paperwork, look through old bank and credit card statements to see if you can spot any regular payments to a life insurance provider and then take it from there.
What happens if there’s no life insurance beneficiary?
Anyone taking out life insurance must include at least one beneficiary according to UK law, so the beneficiaries are usually clear. With joint life insurance policies, the person receiving the payment will be the other person named on the policy, and then the policy ends, leaving the survivor without any life cover. 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.
However, if there’s no named beneficiary, the life insurance pay out will usually go into the deceased’s estate. Their estate includes everything they own at the time of their death, from property and jewellery to savings and investments.
If so, the life insurance money will only be released after jumping through all the hoops to obtain probate – the legal process that follows a death.
If the deceased’s will doesn’t specify a beneficiary or there isn’t a will, a court will have to name a beneficiary. This could lead to delays and disputes. If you find yourself in this situation, it might be sensible to seek legal advice.
Frequently asked questions
What difference does a life insurance policy in trust make?
For most people, the big benefit of writing a life insurance policy in trust is that it makes any pay out quicker and easier. You may only need the death certificate and policy document to claim, and it can speed things up because the money is sent direct to the beneficiaries without getting tangled up in the probate process.
The other benefit concerns inheritance tax.
According to current tax laws, if you write a life insurance policy in trust, any pay out won’t normally be included in the total value of your estate. This means it won’t be subject to the 40% inheritance tax charged on larger estates worth more than the tax-free thresholds.
Few people get hit by inheritance tax – it isn’t paid on anything left to your spouse or civil partner, and otherwise it’s only usually payable on anything above £325,000, or anything above £500,000 if you give away your home to your children or grandchildren, and your estate is worth less than £2 million. Together, spouses and civil partners may be able to leave up to £1 million free from inheritance tax.
Can I make a life insurance claim before I die?
Life insurance policies only usually pay out after death. However, many include terminal illness cover. This means they will pay out early if the policy holder has been given a terminal diagnosis where they’re not expected to live longer than six to 12 months. This can help cover the income of someone no longer able to work or who’s having end-of-life care.
This is different from critical illness cover, which pays out a lump sum or regular payments when the policy holder is diagnosed with an illness listed on the policy that may not result in death.
Is suicide covered by life insurance?
Most life insurance policies in the UK will pay out in full for deaths caused by suicide, as long as they occur after a certain amount of time, covered by the ‘suicide clause’. The suicide clause typically excludes deaths from suicide in the one to two years after the policy is taken out, but check the terms of your policy to be sure. It’s there to discourage vulnerable people from taking their own life for a life insurance pay out.
If you or someone you love is experiencing suicidal thoughts, talk to someone about how you are feeling. Charities like the Samaritans are there to help and support you through difficult times.
What happens to unclaimed life insurance policies?
It can be all too easy to lose track of life insurance policies. Under the Dormant Assets Scheme, if a life policy has been dormant and unclaimed for a minimum of 15 years and the insurance provider has been unable to find a beneficiary, the pay out will go to supporting social and environmental initiatives across the UK.
However, beneficiaries still have a right to reclaim the money they should have received, even after it has been transferred into the scheme.
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