| By Allen C. McLellan, LUTCF, CLU, ChFC, CASL, CFP
BACK TO BASICS
Handling a Death Claim
Helping a deceased client’s family with death benefits is one of your most important tasks.
Let’s take a quick look at handling a death claim on a life insurance policy. It may appear to be a
straightforward “paperwork” exercise: Complete the claim form, attach
the death certificate and wait for the
check. However, it is much more
than routine and provides opportunities for you to render your most
valuable service.
The death claim is the culmination
of the life insurance process. It is why
people buy life insurance; so handling
it deserves your full attention. You (or
another advisor) sold the policy, and
promises must be fulfilled. The death
benefit may only pay final expenses
or it may provide a surviving family
a decent standard of living and send
the kids to college. In every case, the
benefit is important—even critical—
to someone.
After most deaths, emotions run
high, and the beneficiary is often
stressed and worried about the future.
This is no time for an advisor or an
insurer to drop the ball, cause delays or
be insensitive. Therefore, rule No. 1 is to
make the claims process a top priority.
Contact the beneficiary and reassure
him that you will do everything possible to expedite the claim. Express
sympathy, empathy and encouragement, and keep the beneficiary
informed until the check is delivered.
It’s the right thing to do for the client
and for your business.
Be proactive in handling the claim.
Start a separate file and keep an accurate log of phone calls, emails or other
correspondence about the claim. Record to whom you spoke, summaries
of conversations and dates you expect
things to happen, such as receiving
the claims package. If anything is
delayed, immediately contact the per-
In every case, the benefit is important—
even critical—to someone.
son who promised it and resolve the
bottleneck. Don’t accept bureaucratic
inertia. I know of one agent who,
frustrated by empty promises from an
insurer’s claims department, called
the company president directly. The
logjam was promptly broken, and the
claim was paid.
Details matter
Unusual circumstances can arise, so
proceed with caution. For example, a
life policy’s death benefit may significantly differ from the policy’s face
value. Loans, accumulated interest,
withdrawals, misstatement of age or
gender and unknown policy features
and restrictions can affect the ultimate
death proceeds. A word to the wise:
Don’t discuss the amount of the death
benefit until you are absolutely sure of
the total.
Death benefits can be delayed for
perfectly legitimate reasons. I had
a policyholder who died within the
contestability period. The insurer notified the beneficiary and me that the
company would investigate the claim
to verify the health information on the
application. Fortunately, everything
was in order, and the claim was paid
after about three months’ delay. I
know of another case of a “suspicious
death” in which the insurer delayed
payment for several months until a
police investigation determined that
the deceased had died of natural
causes, not suicide.
Shortly after I became an agent, a
policyowner’s son called me to report
that his father had died. The son,
Bob, asked how to file the claim and
told me that he thought the death
benefit was about $7,000 to $8,000.
