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How much is Your Life Worth? Life Insurance Protects Your Family

Filing life insurance claims is never a happy occasion, but having this type of insurance is good protection in a worst-case scenario.


life insurance claims

Filing can be stressful and intimidating for many families, but life insurance is like many other insurance products. Instead of fearing it, becoming knowledgeable about this product takes the mystery out of it. Read also: Why They Call It Universal Life Insurance.


Initiating the Claims Process

In the case of a death in the family, a life insurance policy provides much-needed cash to take care of immediate needs. Calling the insurance agent is a first step, but having the actual policy in hand speeds up the process. Families who do no know who their agent is may contact the insurer directly. If the name of the insurance company that issued the policy is not known, contact the Missing Policy Service at:

  • American Council of Life Insurance, 1001 Pennsylvania Ave NW, Washington DC 20004-2599.


Certified death certificate copies from the funeral director will be needed, and a copy will need to be forwarded with each claim. Be prepared to submit the death certificate along with the claim form and the policy or policy number if requested. Read also: The Best Life Protection.


The life insurance claims settlement can come typically either in a lump sum, an interest income option or as a money market mutual fund. Receiving the insurance money all at once helps pay for funeral expenses and final debts, and anything left over can be invested. With interest income, the company keeps the proceeds but pays out any interest earned. Some insurers choose to deposit the money into a mutual fund paying current market interest rates. Read also: The Benefits of Survivorship Life Insurance Policy.


Life Insurance Statistics

The premiums vary widely based on state of residence, gender, age, weight and health, as well as rating class, length of coverage and the amount of insurance purchased. Most people will readily admit the need to have life insurance, but not as many actually buy a policy. The statistics show a decline in the number of consumers buying policies.


  • According to a 2011 study by Life Insurance Marketing and Research Association (LIMRA), 35 million people, almost a third of the population, have no life insurance coverage.
  • Of those who do, half of U.S. households, 58 million people, have inadequate life insurance.
  • Only 22 percent of individuals born during the periods of 1979 to 1984 and 1982 to 2002 have a policy.
  • In comparison, 43 percent of individuals born between 1976 and 1980 have life insurance.
  • Seventy-five percent of the baby boomers born between 1946 and 1964 have a policy.


When it’s Needed, When it’s Not

The greatest need for life insurance is when parents have a young family. The financial security net it provides when disaster strikes and claims need to be filed is worth the monthly expense. There are times, however, when the need lessens.


Life insurance comes in either term or permanent policies, and permanent life insurance can come in universal, whole life or variable life. Permanent policies accrue cash value, but the premiums are more expensive than term life. To determine which type of policy fits, experts advise planning far in advance of retirement. Read also: Life Insurance Rates for Seniors.


Buying term life insurance can be a gamble. Individuals who buy a policy while they are still young can time it to end when they approach their retirement years. However, when the term expires there is no death benefit available, and the beneficiaries would not receive any payout.


Some experts say there is no need for seniors to have term life insurance. Analyzing the issue from the perspective of income protection, most seniors do not need life insurance when they retire, explains Brad Levin, a certified financial planner with Householder Group, a financial planning company in California. Levin says if they find they do require it, they may only need a policy for another few years. In that situation, he says, it would be less expensive for them to buy another term policy. Read also: Life Insurance Later in Life.


There is no one-size-fits-all policy, but having any type of coverage is better than having none at all. Advance planning to determine the right coverage over a long period of time is the key. When there’s a death in the family and life insurance claims need to be filed, it can mean the difference between financial ruin or recovering and moving on.


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