How To Collect Life Insurance As A Beneficiary

In the wake of a loved one’s passing, beneficiaries will need to understand how to claim the life insurance proceeds and Social Security benefits due to them, as these tasks typically fall outside the executor’s scope of duties. The need to promptly secure funds to cover the decedent’s funeral costs as well as potentially one’s own recurring expenses, such as home loans and credit card payments, is often paramount, particularly for those who relied on the financial support of the deceased. If you have recently lost a loved one and have questions regarding how to collect life insurance as a beneficiary, or about other estate planning matters, you can learn more by speaking with the experienced San Francisco estate planning lawyers of Von Rock Law. Call our offices today at (866) 720-0195 to speak with our experienced and compassionate estate planning team.

How Do You Claim Life Insurance When Someone Dies?

To claim life insurance benefits, beneficiaries should reach out to the insurance company’s local representative or visit the company’s website. If an individual is uncertain about the status of their loved one’s life insurance policy or whether they were named as a beneficiary, the California Department of Insurance offers resources to assist with locating and verifying life insurance policy records. Once the policy has been located, the process will depend to some extent on the operating protocols of the insurance provider.

Navigating Company Protocols

Certain companies initiate the process by requesting beneficiaries to submit a simple form reporting the death; this is typically followed by the company providing a package of forms and guidelines detailing the next steps. As a general rule, a beneficiary can usually request the payout by filing the insurance company’s claim form and providing it to the company with an authenticated copy of the death certificate, which can be requested from the California Department of Public Health.

Adjusting for Multiple Beneficiaries

In instances where multiple adult beneficiaries have been named, each should submit a separate claim form. If the principal beneficiary predeceased the policyholder, the alternate (or contingent) beneficiary is eligible to claim the proceeds. In this scenario, the alternate beneficiary would need to supply the death certificate of both the primary beneficiary and the policyholder.

How Are Life Insurance Benefits Paid Out to Beneficiaries?

After filing a life insurance claim, the insurance company verifies the information and either accepts or denies the claim. In most cases, beneficiaries have a choice of three different types of life insurance payout options.

Lump Sum Payment

Lump-sum payments are widely favored and often the default choice, offering a substantial cash amount to utilize as the beneficiary sees fit. This lump sum can be used to clear mortgage dues, serve as a source of livelihood, purchase a new vehicle, fund a vacation, or used in any other desired manner. Beneficiaries contemplating a lump-sum payout may wish to consult with a reliable financial expert before making a firm decision. For those unsure, or those who have significant debts or concerns about potentially squandering the funds on regrettable expenses, exploring alternative options might be worth considering.


While many life insurance policies disburse the insured’s death benefit as a lump-sum payment, some insurance providers offer beneficiaries an alternative of receiving their payout in the form of an annuity. These annuities allow the remaining death benefit to accrue interest until it’s entirely disbursed, providing a stable source of income for the beneficiary.

A life insurance annuity differs from a life annuity, which serves as a retirement instrument that dispenses payments under certain qualifying circumstances to the designated annuitant. The annuitant could be the individual who purchased the annuity or another party, subject to the policy specifics.

Retained Asset Account

Certain insurance providers offer a provision to keep a beneficiary’s life insurance payout in a ‘retained asset account,’ enabling beneficiaries to withdraw funds at their own discretion. The functioning of this account mirrors that of a checking account: Beneficiaries may withdraw their balances anytime, and the balance accrues interest. Although any interest accrued may be liable to taxation, the original payout continues to be tax-exempt.

If you have questions about life insurance payment options or how to collect life insurance as a beneficiary, you can learn more by contacting Von Rock Law’s San Francisco estate planning lawyers.

How Long Does It Take for a Beneficiary To Receive Life Insurance Payments?

While some companies might disburse life insurance payments within a matter of days, a typical insurer could take anywhere from one to two months to send benefits to a beneficiary. Various factors, such as the submission of incorrect forms or a lapsed policy, may further prolong this process, The company may also need additional time to scrutinize the claim under specific circumstances. For instance, if the cause of death is identified as a homicide, the insurer must first eliminate the prospect of the beneficiary’s involvement in the death before proceeding with the payment of benefits.

When Can a Life Insurance Claim Be Denied?

Under certain circumstances, the insurance company might attempt to deny a life insurance claim. If the policyholder passes away within two years of purchasing the insurance, the death usually occurs within the “contestability period.” This time period is established to allow the company to thoroughly examine the decedent’s medical history to ensure complete disclosure of all relevant health conditions at the time of policy initiation. The insurer may also probe for any unreported high-risk activities, such as scuba diving, which the policy owner omitted from their application, and which subsequently contributed to their death.

When a life insurance claim is denied, the insurance company must provide all beneficiaries with a written explanation. The insurance provider may end the policy and return premiums to the beneficiaries. Beneficiaries in this situation should consider reaching out to the insurance company to attempt to resolve the reason for the denied claim. Additionally, an estate planning lawyer with experience representing clients in insurance disputes could potentially provide useful legal guidance.

Does a Beneficiary Receive All Money in a Life Insurance Policy?

The distribution of life insurance policy funds depends on how many beneficiaries the policyholder named. If there was only one primary beneficiary, they would receive the full payout of the policy. For policies with multiple beneficiaries, the policyholder would have assigned a percentage or dollar amount to each named beneficiary. Each of these beneficiaries would then need to file an individual claim to receive their portion of the policy payout.

Learn More From Our San Francisco Estate Planning Lawyers

If you have questions about how to collect life insurance as a beneficiary, the dedicated San Francisco estate planning lawyers at Von Rock Law are here to help. We understand the importance of resolving outstanding claims efficiently so that you can honor your loved one’s gift and begin the process of moving forward as they would have wished. We can help you file a claim or explore your options if your claim has already been denied. Contact us today at (866) 720-0195 to learn more.

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