How Long Does Life Insurance Take to Pay Out?

Factors that can delay life insurance payouts

Here are a few reasons insurers might delay life insurance payouts:² 

Missing information 

Insurers must verify several pieces of information and documentation before approving a claim. Missing or incorrect documents (such as not sending the death certificate) or incomplete information on insurance claim forms can delay your life insurance payout. 

Policyholders can prevent this from happening to beneficiaries by regularly updating beneficiaries and other information. They should also inform beneficiaries of their beneficiary status and give beneficiaries any relevant information or instructions for filing the claim.

Cause of death 

Insurers investigate the cause of death before approving a claim to make sure that the cause falls within the policy coverage and terms. Deaths that occur under more unusual circumstances may require further investigation on the insurer’s part to ensure the beneficiary’s claim is valid. 

Insurers must make sure the policyholder was not involved in criminal activity at the time of death, nor was the homicide committed by the beneficiary. Either of these can result in the insurer refusing to pay a death benefit.

Fraud 

Life insurance fraud is the most prevalent form of insurance fraud, so insurers who suspect potential fraud will spend additional time verifying the application and policy documents.³ Even if no fraud is found, this can delay payment by several days or longer.

Contestability period 

The contestability period is a one to two-year period at the start of a policy during which an insurer has the right to review a claim more closely. This period exists so insurers can be protected against errors and false or missing information that would impact coverage. For example, a policyholder may have failed to disclose that they are a smoker or that they engage in a hobby deemed “high-risk.” Claims can take longer to process during this period, even if they’re valid, since the insurer must review the circumstances and policy more closely.

How to make a life insurance claim

If you’re a life insurance beneficiary, here’s how to file your claim and receive the payout you’re entitled to:²

1. Gather policy information: Find the life insurance policy documents to better understand the death benefit payout, any other terms, the insurer to contact, and the process for filing a claim with that insurer.

2. Gather proper documentation: Next, gather the proper documentation. This can include:

• The policyholder’s death certificate
• The policy documents
• Proof of identity, such as a passport or driver’s license
• Guardianship documents if the beneficiary is a minor

3. Contact the insurance company: Contact the insurer to inform them the policyholder has passed away and that you are a beneficiary seeking to file a claim. Request claim forms and ask any other questions about filing if you have them.

4. Complete claim forms: Fill out the claim forms completely and accurately. Triple-check your forms, as any incorrect or missing information can delay the payout process.

5. Select payout method: Select whether you want to receive your payout by lump sum, annuity, or retained asset account. Provide the necessary information, like your bank account.

6. Submit your claim: Submit the completed claim forms and copies of other documentation, like your proof of ID and the policyholder’s death certificate. You may be able to do this online, in person, or by mail.

7. Follow up if needed: Insurers may take several days to verify your claim, so follow up every few days to check on the claims process. 

8. Review the death benefit payout: Once the insurer approves your claim, review the payout method and amount to ensure the former matches your preferences and the latter aligns with the policy details. Contact your insurer if anything needs to be corrected.

Get a life insurance quote

Beneficiaries don’t automatically receive the death benefit upon the policyholder’s death. They must file a claim and wait at least several days for the insurer to process it. However, the financial security the death benefit offers is worth the wait.

The policyholder can make things easier for the beneficiaries by informing them where the documents are, who their insurer is, and how to reach that insurer and start filing a claim. If you’re ready to help protect your loved ones, Aflac has plenty of life insurance options to suit your needs. Speak with an agent today if you have any questions or want to get a quote.