How Long Does a Beneficiary Have to Claim on a Life Insurance Policy? (2024)

How long does a beneficiary have to claim proceeds from a life insurance policy? If months or years have passed since the policyholder’s death, should you worry about losing out on the benefit?

The short answer is “no.” There isn’t a time limit when it comes to claiming a life insurance payout. As long as the policy was active at the time when the insured person died—that is, the premiums were paid and there are no grounds for the insurance company to deny the claim—you’ll get the money. However, if you hope to get a timely payout, the earlier you can file, the better.

Key Takeaways

  • There is no time limit on receiving life insurance death benefits, so don’t worry about filling a claim too late.
  • To file a claim, you can call the company or, in many cases, start the process online.
  • Expedite your claim by having a copy of the policyholder’s death certificate available, as well as their Social Security number and policy number.
  • Once a claim has been filed and accepted, you can usually expect payment within 30 days.
  • Each beneficiary must file their own claim.

How to Make a Claim

There are many reasons people delay claiming the death benefit from a life insurance policy. In some cases, they may not even know they’re the beneficiary of a loved one’s policy. In others, filing a claim is not a top priority while dealing with their loss.

If you’re the beneficiary of a life insurance policy—or even suspect that you might be—you should contact the insurance company shortly after the insured person passes away. Depending on the company, you may be able to visit its website to request that a claim form be mailed to you. Some insurers allow you to complete the entire process online.

The carrier will likely ask you to provide the insured individual’s name and date of birth. In order to expedite a claim, it may also request the insured’s Social Security number or policy number, as well as a copy of the death certificate.

Some policies have more than one beneficiary, so it’s important for each person to fill out a claim form in order to receive their payout. If you’re a contingent beneficiary—that is, you’re entitled to all or part of the death benefit if a primary beneficiary passes away before the policyholder—you may need to submit a copy of that individual’s death certificate as well.

Insurance companies are required to hold funds in reserve and to pay into their state's guarantee association fund. If they go out of business, claims will be paid from thecompany's reserves and if the reserves aren't insufficient, the guarantee association helps pay all or part of the claims.

How Long Do Claims Take?

While some companies may pay out within a few days, it can take one to two months for the insurer to send you the death benefit. And the payment can be delayed even further for a variety of reasons, such as if you sent in the wrong forms or the policy has lapsed. The company may also take longer to investigate the claim in certain situations. For example, if the cause of death is a homicide, the insurer must rule out the possibility that the person in line to receive a financial payout was involved in the incident.

In some cases, the insurance firm may outright refuse to pay the claim. If the policyholder dies within two years of taking out the insurance, the death generally falls within the “contestability period.” That means the company has the right to closely review the decedent’s medical history to make sure that all pertinent health conditions were disclosed when the policy was established. The insurer may also look for any risky activities, such as scuba diving, that the policy owner failed to report on their application and that led to their death. If the individual died by suicide during the first two years of the policy, the company may also have the right to withhold a benefit.

If you are having suicidal thoughts, contact theNational Suicide Prevention Lifelineat988 for support and assistance from a trained counselor. If you or a loved one are in immediate danger, call 911.For more mental health resources, see thisNational Helpline Database.

Uncertainty of Beneficiary Status

It’s always a good idea for insured adults to let loved ones know that they’re a beneficiary of a policy, yet that doesn’t always happen. If you’re not sure whether you’re in line to receive a payout, you can double-check by going online and using the National Association of Insurance Commissioners’ Life Insurance Policy Locator Service, which searches its member companies for matching policies.

This service is free, but it can take up to three months to hear back. Therefore, it’s a process you probably want to start only after scouring the deceased’s personal records for more definitive information about their policy.

Even if you don’t contact the insurance company, they may find out about the policyholder’s death eventually. That’s because insurers in some states are required to regularly cross-check their list of customers against the Social Security Administration Death Master File (DMF). When they find out about the death through that process, they’ll contact any beneficiaries, although it may take substantially longer this way.

How Long Does It Take to Collect Life Insurance?

Once a valid claim has been made, it usually takes about 30 days to receive the payment from the insurance company, although it can sometimes take 60 days.

How Long Does It Take to Process a Life Insurance Claim?

An insurance company usually takes several days to a month to process and pay out a life insurance claim. This is because the insurer must ensure the claim is valid, verify the death certificate, and confirm the beneficiaries' identities.

How Long Does a Beneficiary Have to Claim a Life Insurance Policy?

There is no time limit for beneficiaries to file a life insurance claim. However, the sooner you file a claim for a death benefit, the sooner you will receive your money. Filing as soon as possible makes sense because the insurer could need a month or longer to investigate the claim before paying out.

How Long Does a Beneficiary Have to Claim on a Life Insurance Policy? (1)

The Bottom Line

If you found out relatively late that you’re the beneficiary of someone’s life insurance policy, rest easy—there’s generally no time limit on when you can file a claim. However, there are a number of reasons why your payout can be delayed, so it never hurts to gather as much relevant information as you can and start the process sooner rather than later.

How Long Does a Beneficiary Have to Claim on a Life Insurance Policy? (2024)

FAQs

How Long Does a Beneficiary Have to Claim on a Life Insurance Policy? ›

There's no deadline for filing a life insurance death benefit claim — that's good news if you're concerned about how long after death you have to collect life insurance.

How long does a beneficiary have to claim a life insurance policy? ›

There is no time limit for beneficiaries to file a life insurance claim. However, the sooner you file a claim for a death benefit, the sooner you will receive your money. Filing as soon as possible makes sense because the insurer could need a month or longer to investigate the claim before paying out.

How long does it take for a beneficiary to receive money after? ›

In many cases, it takes anywhere from 14 to 60 days for beneficiaries to receive a life insurance payout. But many factors impact this time frame. These include the insurance company's procedures, when the claim is filed, how long the policy was active, the cause of death, and state laws regarding insurance payouts.

What happens if beneficiary does not claim life insurance? ›

The beneficiaries will never receive payment if they do not claim the life insurance benefits. The money can remain with the life insurance company for a certain period, but as you will see below, the life insurance company does not keep the money forever.

How long do you have to have life insurance to collect? ›

How Long do You Have to Pay Into a Life Insurance Policy Before It Pays Out? Life insurance will pay out upon the death of the insured as soon as it is in force. This usually counts as the first premium payment.

Is there a time limit on a beneficiary? ›

There's no standard deadline for paying beneficiaries of a will, but estates complete the probate process in six to nine months on average.

Do life insurance companies contact beneficiaries? ›

Now, what? Many life insurance companies try to contact beneficiaries if the beneficiaries don't contact them first.

What disqualifies life insurance payout? ›

Some of the top reasons for a claim to be denied include fraud, high-risk activities, suicide clauses, policy expiration and the possibility of beneficiaries' involvement in the insured's death.

Do I have to claim money I received as a beneficiary? ›

In general, any inheritance you receive does not need to be reported to the IRS. You typically don't need to report inheritance money to the IRS because inheritances aren't considered taxable income by the federal government. That said, earnings made off of the inheritance may need to be reported.

How do beneficiaries receive their money? ›

Distributing assets to beneficiaries

After all debts have been paid, an estate's remaining assets — minus any probate feeds — are distributed to beneficiaries in accordance with the will, or — if there is no will — by following a state's laws of succession, otherwise known as the “order of heirs.”

What overrides beneficiaries? ›

The Will will also name beneficiaries who are to receive assets. An executor can override the wishes of these beneficiaries due to their legal duty.

What is life insurance beneficiary rules? ›

If your primary beneficiary passes away before you or can't be located, the contingent beneficiary will receive the payout. As a standard life insurance beneficiary rule, you must explicitly identify each beneficiary with their full name and Social Security number.

Can a life insurance beneficiary refuse payment? ›

I don't want to accept the money.” However, when the primary beneficiary disclaims the proceeds, he or she doesn't have the right to decide who should be paid instead. If you waive your rights to the money, the life insurance company will treat the circumstances as if you were a beneficiary who died before the insured.

What is the 3 year rule for life insurance? ›

The Three-Year Rule

Under this IRS rule, the transfer must: (1) take place within three years before the original owner's death and (2) be made without any consideration. If both are the case, then the proceeds from the policy are counted in the decedent's estate for tax purposes.

How soon after taking out a policy can I claim? ›

How soon can you claim on insurance? Once you've taken out insurance, you can typically make a claim any time after the start date on the policy. It's worth checking what this is as sometimes the date you paid for the insurance isn't necessarily the official start date.

What is the 7 year rule for life insurance? ›

The 7-pay test is what the IRS uses to verify whether a cash value life insurance policy has been overfunded. These policies typically have an annual limit on how much you can pay into the account. This limit is based on the amount of premiums it takes for the policy to be fully paid up in the first seven years.

What is the 2 year clause for life insurance? ›

The contestability period is typically two years from the date of application, during which time the insurance company has the right to investigate any information on the application that may be deemed inaccurate or fraudulent. If any inaccuracies or fraud are discovered, it can deny coverage or rescind the policy.

What are the rules for the beneficiary of a life insurance policy? ›

As a standard life insurance beneficiary rule, you must explicitly identify each beneficiary with their full name and Social Security number. Pro tip: Do you live in a community property state? If so, you'll need your spouse's consent to designate a primary beneficiary other than them.

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