Before the Denial: How the Life Insurance Claim Process Works from the Beneficiary’s Point of View
After a loved one passes away, likely the last thing you are thinking about is how to collect a lump sum of money. Unfortunately, life insurance benefits are a necessary evil in most cases, and you don’t have an unlimited amount of time to make that claim. So, you call your insurance agent or the insurance company and ask about how to file a claim. In a few days, the claim packet arrives at your house, which usually includes a bunch of repetitive forms asking you to confirm your identity, to provide policy information, the insured’s name, social security number, and date of birth. The packet also includes fraud notices for every state regardless of where you’re located, and a request for documents such as a death certificate, obituary, and proof of identification (your driver’s license or ID).
Pro Tip 1: Do not send original copies of your policy documents or death certificate to the insurance company unless they specifically ask for it. You will likely not get it back.
Pro Tip 2: MetLife, in particular, has a habit of automatically choosing a “Total Control Account” as your method of receiving the death benefits if you don’t opt-out. A TCA is basically a bank account held by MetLife who invests (and makes money on) your life insurance benefits until you use the money or take it out of the account. Check out the most recent class action against MetLife for this exact behavior.
Once the claim packet is submitted to the insurance company, the waiting game begins. In my experience, you should expect to wait between one to three months to receive a claim determination from the insurance company. During that time, they may request additional documentation, ask you for clarification on the information provided in your claim packet, or even request medical records depending on the type of policy.
Pro Tip 3: Withholding responses, documents, or information from the insurance company will only delay your claim further. Trust me…they’re looking for a reason not to pay and keeping information from them will be more than enough.
Okay, you’ve waited three long months for one of three things to happen:
- The insurance company sends you a check for the life insurance benefits, and you can get back to your regularly scheduled program.
- The insurance company sends you a letter about why they aren’t paying you.
- The insurance company sends a letter about why they probably won’t pay you but are willing to allow you to provide additional information for their review.
If option number one happens, this is the end of the road. Cash your check and take a sigh of relief. If option number two or three happens, you can either roll over and play dead, or get ready for a fight.
Let’s assume, for this blog post’s sake, that you choose to fight. Nothing is requiring you to get an attorney if your life insurance claim has been denied. You are absolutely free to handle your appeals yourself. Of course, that is the cheaper option. However, depending on the type of policy, there may be only one or two appeals available. After that, the insurance company may send you a template letter saying they have made a final decision, and no further appeals will be considered. Once your appeals (and you) are exhausted, generally, your only other option is to file suit.
Pro Tip 4: Initiating a lawsuit can be a cumbersome process. You can file a lawsuit without an attorney (it’s called a “pro se Plaintiff”) by following the pro se instructions on the court website. However, aside from being costly, there are a ton of rules, procedures, and deadlines to follow to ensure that your claim moves forward. Therefore, I would definitely recommend getting an attorney to assist you.
During my time as a life insurance attorney, I have had clients reach out very early in the process because they don’t want to “mess anything up” and prefer someone else to handle the process…that’s absolutely fine. I have also had clients reach out to me as a last resort because they have exhausted their appeals and don’t know what else to do…that limits what I might be able to do for you, but it is also fine. Obviously, there are plenty of clients that fall somewhere in between. The point is that I’m here to help at any point in the process.
Pro Tip 5: If you absolutely don’t have a legal claim to the life insurance benefits, an expert can generally tell you that pretty quickly. Don’t waste your time with attorney’s offices, who put your claim on hold for weeks to “review your case.” Instead, find an experienced attorney who will give your case the immediate attention it needs to get the ball rolling.
