Life Insurance Claims Process: How to Receive a Life Insurance Payout

When you lose a loved one, there is a bound to be a lot on your mind. You'll need to pay medical bills, arrange a funeral and perhaps console children or other relatives. With so many moving pieces, many people don't realize that a life insurance claim must also be a part of their to-do list. 

You're not alone if you thought that the check from a life insurance policy would simply be mailed to you after the death of a loved one. The truth, however, is that to ensure the prompt delivery of a life insurance payout, a beneficiary must take initiative in order to receive the policy owner's death benefit.

While it's not difficult to receive a life insurance payout, there are steps that need to be followed.

How do you file a claim for life insurance?

1. Locate the life insurance policy. The first thing you'll need to do is find your loved one's life insurance policy. Hopefully you've kept it in a safe place, but if you have trouble finding a hard copy, try contacting the company who wrote the policy to ask if they can resend the document or if there is an electronic copy you can access. After you've got the policy in hand, verify how much it's worth and, if it's a term life insurance policy, the duration of coverage.
2. Get a notarized copy of the death certificate. You'll need to obtain a death certificate, which you can usually get at the hospital or from the funeral home. You'll eventually need to submit this document to your insurance company for verification purposes. It's also a good idea to keep a few copies of the death certificate on hand in case you need them later.
3. Contact the life insurance company that wrote the policy. Once you have your loved one's life insurance policy and their death certificate, contact the claims department of the life insurance company that wrote your policy. At this point, they'll open a claim for you.
4. Send the life insurance company the death certificate and information about your loved one. You may need to fill out a few forms and sign some documents before the payment process can begin. Once you've sent the proper information, though, the insurance company will initiate payment.
5. Wait for payment. After you've sent all of the needed information, your part is generally over. The insurance company will verify the death of the policy owner on their end, and send you payment either electronically or by check.

How long does it take to get a life insurance payout?

After all of the needed information is provided to your life insurance company, the payment process is typically pretty quick. On average, you can expect payment to be issued within 7 to 10 business days. Keep in mind, though, that estimate is a best case scenario. There are many cases in which the claims department may have additional questions or need more information from you or others in order to process your payment.

How can you receive a life insurance payout?

There are two primary ways that you might choose to receive a life insurance payout.

1. Lump sum: A lump sum payment means that you will receive a check for the full amount of your loved one's life insurance policy. This option allows you to manage and spend the money as you see fit.
2. Installments: You can sometimes choose to accept payment in installments over a period of time. With this option the life insurance company will generally hold the money and send you a series of payments over a designated period of time. If you choose installments, you might be entitled to interest payments from the insurer as well.

If you have more questions about how to file a life insurance claim with American General Life, call customer service at 800-888-2452. If you want to learn more about how to manage your life insurance policy, go to our section for policy owners.