They Passed Away With Life Insurance: How to Claim It Without the Money Getting Stuck

When someone you love passes away, filling out forms is the last thing you want to do. I know. In 15 years as an agent I've sat with a lot of families in that moment, and I almost always hear the same question, sometimes barely above a whisper: “So how do we collect the insurance?” The good news is that the process is usually simpler than it seems. The hard part is that a few small details can hold up the money for weeks or even months. Here's what they are and how to avoid them.

First: find the policy and gather the paperwork

It sounds obvious, but many families don't know for sure what coverage their loved one had, or with which company. Take your time going through papers at home: the policy itself, letters from the insurer, annual statements. Check bank statements, because a monthly charge to an insurance company is a strong clue. Ask their employer, since many jobs include group life insurance the family never heard about. And if you know which agent sold the policy, call them. Once you know the company, this is what nearly all of them will ask for:

• Certified copies of the death certificate. Order several from the funeral home or the county records office, because the bank, the insurer and other offices will each want their own.
• The policy number or, if you can't find it, the full name, date of birth and Social Security number of the person who passed.
• The insurer's claim form, filled out and signed by the beneficiary.
• A photo ID for the beneficiary.
• The beneficiary's bank account details, if the payment will be made by direct deposit.

One practical tip: call the insurer yourself, ask what's missing, and write down the name of the person you spoke with and the date. That little note is worth gold when you have to follow up.

What gets the money stuck (and how to avoid it)

In my experience, delays rarely come from a company that doesn't want to pay. They come from details nobody checked in time:

• The beneficiary already passed away or was never named. Then the money may have to go through probate, the legal process for the estate, and that takes time.
• The beneficiary is a minor. Insurers usually won't hand the money directly to a child, so a legal guardian or a trust may be needed.
• The information doesn't match: a last name spelled differently on the policy and the death certificate, or a wrong date. Fixing it takes time.
• Forms that are incomplete or unsigned. It sounds silly, but it's one of the most common problems.
• The policy was new. If the person passed shortly after buying it, the company may review the application more closely before paying.

While you wait for the payout, what about the funeral home?

This is where the real stress lives. The funeral home needs to be paid soon, and the insurance money hasn't arrived. In Texas, a funeral costs about $9,200 on average, according to the NFDA, and the quotes I've personally seen run from $4,000 to $18,000. That's not money most families have sitting in the bank.

Ask the funeral home whether they accept an assignment of benefits. Many do: the beneficiary signs so the insurer pays the funeral home directly for the service, and the rest goes to the family. It's not required, and you should read carefully before signing, but during those days it can take a huge weight off your shoulders. That's exactly why final expense insurance pays the beneficiary directly: so the family can cover the funeral without borrowing.

If it turns out there was no policy

If you're reading this because you lost someone and found out there was no coverage, I'm truly sorry. Your family isn't alone in this: an estimated 60% of Hispanic families in Texas don't have life insurance. I'm not saying that to scare you. I'm saying it because it can be fixed calmly, so your kids don't have to go through the same thing. Final expense insurance starts at $30 a month, with no medical exam, for ages 30 to 85, and it accepts common conditions like diabetes or high blood pressure; approval usually takes about 48 hours. If what you want to protect is bigger, like a mortgage, debts or your household income, life insurance starting at $50,000 may make more sense.

Mario Barrera, licensed insurance agent. TX License #3008095, NPN 17440153. Licensed in Texas, California, Florida, New York, Illinois, Arizona, Virginia and Maryland. All coverage is subject to approval; price and eligibility vary by age and health. This guide is for information only: each insurer sets its own claim requirements, and it is not a substitute for legal advice.

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