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#1
Old 08-16-2006, 12:46 PM
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Join Date: Oct 1999
Location: Exham Priory
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How long should a life insurance payment take?

My mom passed away Saturday before last. My older brother and I racked up some debts having her cremated and arranging for a memorial service at her church. She had life insurance, and the premiums were kept up to date. We had planned to use the money from the life insurance to cover these expenses.

Now a woman at work tells me that her father passed away back in January, and she and her mother STILL can't get the insurance company to make good on the policy. It seems that the company still keeps asking for more and more documents, usually medical, before they'll cut a check.

So now I'm kind of worried. Is this at all typical, or are they jerking her around?

What is a reasonable length of time for an insurance company to pay off on a life insurance policy? Two or three weeks is of course not unreasonable, but if it gets to be two or three months, should I consider consulting an attorney?

I have no experience with making a claim on life insurance. I have no idea what to expect. If anybody out there will give me the benefit of their own experience in such matters, I'll be grateful.
#2
Old 08-16-2006, 03:13 PM
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Join Date: Apr 1999
Posts: 23,454
When my father died, I seem to recall all his insurance policies paying off in a couple of months or less, except for one.

That policy (a very old one) had his wife and parents listed as beneficiaries. As all three of them had died before my father, we had to round up proof-of-death for them before the insurance company would release the policy to the estate.

Life insurance is like most other bureaucracies. If you haven't filled out the paperwork correctly and included all the documentation they ask for, they'll kick it back to you again and again until they're 100% satisfied.

I don't know what other medical documents an insurance company would require besides a death certificate. Were there unusual circumstances surrounding your co-worker's father's death?
#3
Old 08-16-2006, 03:37 PM
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Join Date: Dec 2005
Location: Van Nuys, CA
Posts: 11,663
Quote:
Originally Posted by LonesomePolecat
My mom passed away Saturday before last. My older brother and I racked up some debts having her cremated and arranging for a memorial service at her church. She had life insurance, and the premiums were kept up to date. We had planned to use the money from the life insurance to cover these expenses.

Now a woman at work tells me that her father passed away back in January, and she and her mother STILL can't get the insurance company to make good on the policy. It seems that the company still keeps asking for more and more documents, usually medical, before they'll cut a check.

So now I'm kind of worried. Is this at all typical, or are they jerking her around?

What is a reasonable length of time for an insurance company to pay off on a life insurance policy? Two or three weeks is of course not unreasonable, but if it gets to be two or three months, should I consider consulting an attorney?

I have no experience with making a claim on life insurance. I have no idea what to expect. If anybody out there will give me the benefit of their own experience in such matters, I'll be grateful.
If they're asking for medical documentation, his death was likely related to a medical condition that would be excluded if he had not disclosed it at the time the policy was written. (Known as material misrepresentation) If there are no issues like that in your mothers case, the company should pay much sooner. State law typically gives a certain time that claims must be paid, I don't recall exact numbers at the moment...haven't needed to know them since my license exam.

[insurance agent hat off]
Condolences on the loss of your mother, my thoughts will be with you.
#4
Old 08-16-2006, 03:42 PM
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Join Date: Mar 2006
Location: Salt Lake City, UT, USA
Posts: 10,046
This is going to be a pretty much ideal example, and not much use here except as perhaps an incentive for readers to do likewise, but:

My Dad had the same insurance company (New York Life) and same agent (Pete Z.) for over 20 years. When Dad signed up for his policy, he and pete were both in their early thirties. When Dad died, they were both over 50. That's a long business relationship. I remember Pete showing up every year or two at our house to go over Dad's policy with him. We got a Christmas card from him each year, and it had a real live handwritten note inside.

When Dad died, Pete showed up at the funeral three days later and gave a check to my mom. Or, more accurately, he gave her a statement of how much insurance money she had, and a book of checks she could write to draw on that money. I can't tell you what a relief it was, in the middle of all the funeral home and cemetery insanity, to have something work like it was supposed to.

Moral of the story? If you don't have life insurance yet, get some, and if at all possible, stick with the same provider. It might (no pun intended) pay off in the end.

OTOH, I totally sympathize with the OP. It sounds like many of the experiences I've had with health insurance companies. They hold that dollar until the eagle screams. :mad
#5
Old 08-16-2006, 03:44 PM
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Join Date: Mar 2004
Location: On the level, if inclined
Posts: 14,327
As an agent I was often handing out settlement checks within 10 - 14 days. It's a pretty simple claim--the insured is either dead or not. Mostly dead, which is still partly alive, is generally grounds to invalidate the claim.

If there is a substantial delay in payment Antinor01 has given the only acceptable reason that I can come up with.
#6
Old 08-16-2006, 03:45 PM
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Join Date: Sep 2001
Location: Calgary
Posts: 1,011
From experience you should get the cheque in a couple of weeks if the paperwork is filled out correctly and there are no problems. In the other case if they have not paid since January, then the insurance company if concerend about something or investigating something.
#7
Old 08-16-2006, 03:51 PM
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Join Date: Mar 2006
Location: Salt Lake City, UT, USA
Posts: 10,046
Quote:
Originally Posted by Mikemike2
From experience you should get the cheque in a couple of weeks if the paperwork is filled out correctly and there are no problems. In the other case if they have not paid since January, then the insurance company if concerend about something or investigating something.
And if they are investigating something or concerned about something, don't they owe it to the insured's family to let them know the reason for the delay?
#8
Old 08-16-2006, 04:12 PM
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Join Date: Feb 2005
Location: Land of Beer and Cheese
Posts: 375
Arenít most policies only contestable in the first two years? I seem to remember that even if you misrepresented any health matters, they could only contest the death benefit during the first two years of the contract.

I can't find a good link but that's how I remember it.
#9
Old 08-16-2006, 04:20 PM
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Join Date: Dec 2005
Location: Van Nuys, CA
Posts: 11,663
Quote:
Originally Posted by guppy
Arenít most policies only contestable in the first two years? I seem to remember that even if you misrepresented any health matters, they could only contest the death benefit during the first two years of the contract.

I can't find a good link but that's how I remember it.
In most cases yes, it varies by state law.
#10
Old 08-16-2006, 04:33 PM
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Join Date: Sep 2001
Location: Calgary
Posts: 1,011
Quote:
Originally Posted by guppy
Arenít most policies only contestable in the first two years? I seem to remember that even if you misrepresented any health matters, they could only contest the death benefit during the first two years of the contract.

I can't find a good link but that's how I remember it.
Policies are only contestable for two years for misrepresentation, but are always contestable for fraud. If a person knows they have cancer, and get insurance by stating they are in good health, that would be fraud. Fraud is of course a lot harder to prove than misrepresentation.

Certainly an insurance company should let a family know why a claim is being delayed.
#11
Old 08-17-2006, 12:03 AM
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Join Date: Mar 2004
Location: Sydney, NSW, Australia
Posts: 11,386
Have you contacted the insurer and asked the claims staff how long the process will take? In my experience working with a life insurer, if you have a death certificate and the cause of death isn't problematic (i.e. falling within one of the policy exclusions), a cheque is usually issued within a fortnight.
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