Life Insurance & Funeral Services: Striving for a Common Ground
We all know that when you get a life insurance policy, you also get the ability to designate a beneficiary to the policy who will receive the life insurance benefits after your passing. However, what a lot of people don’t know, is that you can also designate an organization or business as a beneficiary to your policy. Often times, a person will apply for a life insurance policy as a means of paying for their final expenses and funeral costs. As a way of ensuring that the funeral services are paid for, an insured person may make a funeral home the beneficiary to the policy. Therefore, once the insured person passes away, the funeral home has a right to make a claim to the assigned portion of the death benefits to cover the funeral expenses.
Another way a funeral home may get involved in a life insurance matter, is where a beneficiary assigns a portion of the life insurance benefits to pay for the funeral expenses. After an insured passes away, the beneficiary works out an arrangement with the funeral home for payment to be made after the life insurance benefits are paid by the insurance company. However, both the beneficiary and the funeral home may wind up in hot water if the insurance company denies the claim for death benefits. In that case, neither the funeral home, nor the beneficiary gets the money they relied on and the funeral costs fall on the beneficiary entirely.
From the funeral home’s point of view, they obviously want to be paid for the services they provided. However, they also have to balance that with keeping strong ties in the communities they serve, as well as being compassionate and sympathetic during their customers’ time of grieving. With that in mind, funeral homes tend to seek a more collaborative approach to recouping their fees by offering payment plans or suggesting funeral funding companies before resorting to a nuclear option like collection agencies.
When you don’t pay your electricity bill, your lights are turned off. But if you don’t pay a funeral bill for an extended period of time, you may begin receiving phone calls from a collection agency or from an attorney who represents the funeral home. Either way, you’re sure to have quite a mess on your hands. Avoiding this situation entirely starts with appealing the denied or delayed claim through the life insurance company. Although this is can be a time consuming, and frustrating process it could help avoid a tanking credit score, and a stack of costs associated with small claims court.
I won’t get into the nitty gritty of appealing a claim for life insurance benefits in this post, but there are some things you can do to ease the stress in this situation specifically. First, find an attorney that specializes in life insurance law. Then, thoroughly explain your situation with the funeral home and ask the attorney to reach out to them directly. A good attorney will speak with the funeral home, explain the appeal process, and make clear that all parties are working toward the same goal – getting the life insurance benefits. Once that is done, a good attorney will not only work on your behalf to appeal the life insurance claim, but also work as a liaison between you and the funeral home to keep the peace and get you both paid without collection agencies or small claims court.
