Filing a life insurance claim

0:01- Hi, everyone. So life insurance is never my favorite topic. We have other videos where we talk about what it is and why you might wanna get a policy, and in this video I'm gonna talk about it from the beneficiary's point of view. And as you can imagine, maybe it's good news that someone you care about got life insurance, but it's for the most part very bad news that now it's effective and that they passed away.

0:23So once again, not my favorite topic, a little bit morbid, but it's important for you to know because just the fact that someone had a life insurance policy doesn't mean that everything is just going to be automatic and that one day a check is gonna show up in your mailbox.

0:35There are things that you need to do and make sure that you have to make sure that everything goes the right way. So the first thing is you have to contact the folks that, wherever the insurance is being kept. If it's an individual policy, you need to contact the insurance company.

0:52If it's a group policy through the employer of whoever had the policy, then you should contact the HR department in that situation. Now when you contact either one of them, especially in the case of an individual policy, you are going to need, one, a copy of the death certificate.

1:10Once again, these morbid subjects, don't like to talk about it, but it is important. You would need the policy number. So let's say that you think or you suspect that you are the beneficiary of a life insurance policy. And no one ever likes to talk about this, and it's kinda like, "Hey, what's your policy number on your life insurance policy?," (chuckling) but it's good to know.

1:27You know, a few times when I've gone on trips, and I've always had issues with planes, I would make sure I would forward my policy number to my wife and to my kids just in case. And you know, I know statistically planes are even safer than driving, et cetera, et cetera, but that's where my brain always goes.

1:42So, but it's in some ways good that at least, you know, on a regular, maybe annually, you are making sure that the people who should have the policy numbers have the policy numbers. And then you need a claim form from the insurance company. And if you ask for them for one, they will give you.

1:59And then you're gonna need your ID, because if you're a beneficiary, you need to prove that you are who you say you are. And it many times could be dealing with a lot of money, so they definitely have to verify that you are who you say you are. Now, there's some good things about life insurance benefits.

2:17One is it is not taxed, so you don't have to pay income tax, or gift tax, or anything there. It's tax-free, so that is a very positive thing. And then it also skips something called probate. Probate is this term that I only learned as an adult, that if someone passes away and if they haven't done really clear planning, essentially, the estate, the estate is essentially all of the assets and the liabilities of the person who passed away, it gets essentially taken over by a court, and the court drives the process.

2:48And the problem with that is it can be very lengthy, it can be expensive, you might have to pay for lawyers there. If people are disputing things, it could go even longer. So in general, you want to avoid probate as much as possible. And so life insurance avoids probate.

3:04You can kinda go directly. And there's other things like a living trust that you can create where you can go around probate, or let's say my wife and I have a joint bank account, and if I were to pass away, then she still has access to that joint bank account.

3:18She doesn't have to go through probate and you know, maybe wouldn't even be able to pay the bills if she had to go through probate for several months, or even longer. So hopefully that gives you the highlights of if you are a beneficiary, make sure you have the data, make sure you know what you're going into, making sure all the information is up to date, especially if there's changes in your life or the beneficiary's life, if your name changes, maybe you get married, or if the beneficiary has some life changes, maybe there's a divorce, or other people are being added or taken out of the beneficiaries, make sure that all of that is up to date.