How to guide
Why this matters
Life insurance proceeds pay to the named beneficiary directly, outside of probate, and are typically tax free. They can be available within 30 days of filing and provide critical financial support during the probate period.
Step by step
- Find the policy documents. Check the deceased's files, safe, email, and any binder labeled "insurance." If you cannot find it, check bank records for premium payments, which reveal the insurer.
- Call the insurance company's claims department. Most have a 1-800 number specifically for death claims.
- They will send a claim form. Complete it with the policy number, the deceased's information, and your information as beneficiary.
- Return the claim form along with a certified death certificate (original, not a copy).
- Most insurers pay within 30 to 60 days of receiving a complete claim. Some pay faster.
- Choose how to receive the payout: lump sum, annuity, or a retained asset account. Lump sum is usually the right choice for most families.
- Save documentation of the payout for tax records (the proceeds themselves are typically not taxable income, but any interest earned is).
Forms you will need
- Insurer-specific claim form
- Death certificate (certified original)
State by state notes
Insurance is regulated by state, but the claim process is nearly identical nationwide. State insurance commissioners can help if the insurer is unresponsive.
Common mistakes to avoid
- Not searching thoroughly for policies. Group life through employer, association, or credit card is easy to miss.
- Sending a photocopy of the death certificate. Insurers require certified originals.
- Choosing a retained asset account without understanding the terms. These are not FDIC insured and earn low interest.
What to do if you get stuck
If you suspect a policy exists but cannot find it, search the MIB Group lost policy locator (mib.com/lost_life_insurance.html) or your state's unclaimed property database.
Frequently asked questions
How long does life insurance take to pay?
Most insurers pay within 30 to 60 days of receiving a complete claim with the death certificate. Some pay faster.
Is the payout taxable?
Generally no. Life insurance death benefits paid to a named beneficiary are typically income tax free. Interest earned on the payout after death is taxable.
What if I cannot find the policy?
Check bank statements for premium payments. Search the MIB Group lost policy locator. Check unclaimed property databases. Ask the deceased's employer about group life insurance.
What if the insurance company denies the claim?
Get the denial in writing with reasons. Common reasons include contestability period (suicide or fraud within 2 years of policy issuance) or material misstatements on the application. Contact a life insurance attorney if you believe the denial is wrongful.
Should I take a lump sum or an annuity?
For most families, a lump sum gives the most flexibility. Annuities can make sense for specific situations (a beneficiary who cannot manage money, or to lock in retirement income).