When a loved one has passed on there are various things that need to be organised besides the funeral. Things can get stressful very quickly, especially if you are not sure how the claim process works on policies with regards to funeral and life insurance policies that are supposed to help with covering the financial aspects of a funeral.
Knowing how long the waiting period is for you to receive the payout from the deceased’s policy can make it less stressful when planning the funeral and avoid you having to dig into your pocket. Here are a few things that happen once you have placed a claim.
The waiting period
A waiting period is a time frame in which you must wait before you can claim or have an insurance benefit paid out. This will differ from insurer to insurer but is usually stated in the policies terms and conditions. For most insurers this could be between 24-48 hours for you to receive the payout to cover the funeral costs.
It is also important to remember the time frame in which your loved one has taken out the policy. For example, If you take out a life insurance policy and insure additional lives such as your spouse, children, or extended family members you are looking at a 6-month waiting period. What this means is that you will only be able to claim from your policy 6-months after the date in which your policy was in effect. The same will go for the accelerated funeral benefit. Should your loved one die before the 6-month waiting period your claim could be denied.
Considerations for a suicide related claim
Most insurers will have a waiting period of 24-months on covering suicidal deaths to decrease the chances of scammers looking for a way to get a quick payout. Always remember to check the inclusions and exclusions that come with your policy which tend to list the waiting periods.
The payout for life insurance might take longer
One of the common confusions that people have with funeral and life insurance is the payout period. Funeral insurance takes a shorter time frame with the payout being made within 24-48 hours to help you cover the costs that come with burying your loved one.
However, life insurance payouts could be paid out within a space of two to three weeks or two months. Should you have a life insurance policy that comes with an accelerated funeral benefit and no funeral insurance this means that your insurer will payout a percentage of the life insurance for you to cover the costs of the funeral.
The reason why the life insurance payout is paid later is that insurers have to make sure that your loved one passed under natural circumstances or because of an accident.
They also need to check that the information that your loved one has submitted was correct and there were no pre-existing medical conditions that they did not disclose that resulted in their death.
