What Happens When You Make a Life Insurance Claim?

The craziness of the pandemic has pushed how important having life insurance is into full, eye glaring focus. Nobody wants to think about what will happen when you exit stage left but, as boring as it can be, preparation is always key.

So you’re paying your premium monthly towards your life insurance, serious illness cover and income protection, but what happens when you or your loved ones need to claim on that policy?

How to Claim on Your Life Insurance

There are four steps that you will take when you make a life insurance claim.

1. Notify your insurance company or broker
2. Give them brief details of the claim and request a claim form
3. Complete the claim form so the insurer can request medical evidence from your GP
4. The insurer reviews the medical evidence and your original application form and all going well, pays your claim.

Luckily for us, and by us, I mean life insurance policyholders, all of the insurers have a pretty similar philosophy when it comes to handing out the cash you’ve been expecting.

Firstly, it doesn’t matter how long you’ve had your life insurance. Ten years or ten weeks. If the worst happens, your insurer is legally bound to show you the money.

That’s right, even if you purchased your policy so recently that your first premium payment date hasn’t yet rolled around!

One of my first claims was very early on in a policy. IIRC my clients had paid €43.80 in premiums before the husband died tragically in an accident. The insurer paid out €250,000, enough to give his young wife the funds to build a family home – one that I run past on occasion – a house that an insurance payout built. It’s a reminder of why I do what I do.

What is a valid Life Insurance Claim?

I am duty-bound to let you know; it must be a valid claim for the insurer to pay it out.

So what are some of the reasons your insurer could slap a big fat nope on your life insurance claim?

Suicide, within the first year of cover (doesn’t bear thinking about, I know)
Unpaid premiums (trying to claim on a dusty old policy that hasn’t been paid since Jesus was a boy)
Illness not covered on your specified illness policy
Deliberate non-disclosure of information (in other words, lying – don’t do it, it’s not big and it’s not clever and could ruin the lives of your loved ones)

When would you make a serious illness claim on your Life Insurance?

There are so many different situations that arise that may require you to make a claim on your, or someone else, life insurance policy.

Perhaps you get diagnosed with a serious illness that’s covered in your policy.

The insurers understand that you don’t want to deal with paperwork, back and forth phone calls, and anything else that can make an already pretty damn stressful time even more of a headache, so they try to pay your claim quickly and efficiently

You may find this hard to believe because insurers, as a species, have a pretty bad rep

Insurers – schwines and tiefs, de lot of dem.

However, the life insurance providers are the good guys of the insurance industry, granted it is a pretty rotten industry.

They don’t withhold your wonga for no good reason.

As long as you haven’t told fibs on your application, they will pay your claim.

I’ll wager you didn’t think of insurers as thoughtful, understanding, and willing. But speaking from years of experience making life insurance claims, I can vouch for them.

Declined claims are rare and I’m not just saying that.

Did you know the payout rate for life insurance claims across the Irish market is north of 98%?

I’d hate to hazard a guess at what the equivalent percentage is for car or house insurance.

What if the death is suspicious?

So what would happen if the death was suspicious and under investigation? Surely that would slow down the whole shebang until a cause of death is confirmed?

Well, not so!

Most insurers can get their mitts on something called an ‘interim death certificate’. This little nugget allows your insurer to process your claim without having to wait for all the gory investigations.

See what I mean about insurers being a pretty understanding bunch?

They don’t want to see you stuck in a bad spot when things are at their worst. They exist to provide you with a reliable and easy source of money when you need it most.

By the way, if you’re aimlessly channel surfing looking for something to watch, I thoroughly recommend Only Murders in the Building on Disney +

Over to you

Look I know I’m trying to keep things light-hearted here, death and the need for life insurance isn’t the cheeriest of subjects but the more we talk about it the more we can protect ourselves and our families should the worst actually happen.

Life insurance policies exist to mitigate the risk of financial distress for you and your family should a catastrophe strike.

You can either take on this risk personally by burying your head in the sand, rubbing your lucky charm and HOPING nothing ever goes wrong.

Or you can pass this risk to an insurer knowing that medical bills, funeral costs, mortgage payments, or really any financial hardship you or your family may face will be taken care of.

No sleepless nights wondering if you can keep the lecky on, no limited casket choices – I know, they go in the ground but don’t you deserve that polished walnut with pure gold accents?

No fear of losing your home because your income protection payout has given you the means to pay the mortgage and keep a roof over your head.

Sure, life insurance can even stop you from dying from COVID!

Those Dying From Covid-19 Are Least Likely to Own Life Insurance
U.S. life insurers are paying out far fewer Covid-19 death claims than initially expected, largely because the virus is disproportionately killing people with little to no insurance.

If you’d like me to make a recommendation on the best types of cover for you at this very moment in your life, have at this questionnaire and I’ll be right back with a no-obligation recommendation.

Thanks for reading.

Take care
Nick