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Getting a Life Insurance Denial Letter is Pretty Common

Posted in Life Insurance , Life Insurance Claims

February 24th, 2010
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It is more common than you think for a beneficiary to get a denial letter after filing a life insurance claim. That’s at least according to a new press release from Pennsylvania life insurance law firm, Lassen Law Firm, that explains that life insurance companies regularly deny claims – and for a lot of simple reasons.

Why Your Life Insurance Claim Could be Denied

We often think that once we purchase a life insurance policy, all of our family’s problems are solved. They won’t have to worry about money once we’re gone and we can rest easy knowing everything will be taken care of after obtaining life coverage.

However, this is not necessarily true. According to Lassen Law Firm, life insurance companies can deny claims for something as simple as “having a misspelling in the name of the deceased.” The idea for the company is to hold on to its money, says the law firm. In order to do this, it often comes up with ways to prove there was a misrepresentation on the original policy – or even that medical history is inaccurate.

What to Do If You’re Denied

If you’ve found that your company has denied you coverage, the law firm suggests that you contact a lawyer you trust to help you investigate whether or not the claim was legitimately denied. There’s a chance that the company could be using terminology you don’t understand to confuse or intimidate you into avoiding any further investigation into the denial. Don’t let this stop you from pursing what’s rightfully yours.

But the best way to ensure the process moves smoothly is to have the policyholder check over the policy thoroughly to make sure that all information is perfectly accurate shortly after checking life insurance rates and obtaining coverage. This way, the beneficiary won’t have any problems filing the claim later down the line.

Being Prepared to File a Life Insurance Claim

Posted in Life Insurance , Life Insurance Claims

April 24th, 2009
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Having to file a life insurance claim at any point is a tough job, but it’s good to be prepared for when that day comes. What type of preparatory measures can be taken to ensure that you’re ready to handle filing the claim? Let’s take a look at a few ideas to better know the processes involved.

Read Through the Entire Life Insurance Policy

One way to better prepare to file an insurance claim is to read through the life insurance policy to make sure that you understand exactly what you are to receive. And if you’re not the only beneficiary, it’s good to know what everyone is entitled to so that if the policy is lost over the years, you’ll be aware of what’s in the policy.

Know Where the Insureds Documents Are Kept

While the person who has named you a beneficiary is still alive and well, it’s good to find out where they keep important documents so that when the time comes to file an insurance claim, you won’t slow the claims process down by having to first locate the information you need.

Obtain a Copy of the Death Certificate

If your loved one has passed away, in addition to knowing where the life insurance documentation is, it’s important to make sure that you obtain a secure, certified copy of the death certificate so that you will have it ready for proof that the insured died. The company your loved one worked with may not require this documentation, but it’s good to have it just in case.

It’s recommended to be as prepared as possible before having to file a life insurance claim. This way, when it’s time to receive the proceeds from the life insurance policy, you won’t run into any stumbling blocks.

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What is an Annuity Forfeiture?

Posted in Annuity , Life Insurance , Life Insurance Claims , Life Insurance Riders , Permanent Insurance , Term Insurance

April 20th, 2009
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Planning for retirement is crucial to ensuring that you will be able to provide yourself with a level of comfort when you are no longer working. One such investment tool many utilize to ensure a steady cash distribution is by arranging an annuity with a life insurance company. Individuals make a contract with an insurance company where the individual pays regular premiums until a set date that the annuity starts providing the policyholder with payouts. Annuities can be a good investment tool, but in some circumstances a pure life annuity can result in a forfeiture of investments.

Annuity Forfeiture Basics

In the case of an annuity, a forfeiture is when the annuitant dies earlier than anticipated, thus resulting in the annuity payments subsiding. If you invest in a pure life annuity to begin paying you at a certain age and you die only after a couple of months or years of payouts, the remaining money is lost to your heirs. With a pure life annuity, the payouts cease when the annuitant dies and the rest of the money becomes the property of the insurance company.

Preventing Annuity Forfeiture

By opting into adding a clause to your annuity policy, the chances of forfeiture can be mitigated. Riders can be added to your annuity contract stating that your benefit payout must occur for a certain period of years. For example, say you set up an annuity to pay out at 65 and add a clause to be paid for at least a total of 10 years. Even if you die at age 70, your heirs will be entitled to the additional five years of benefits as that would be part of the contract terms. If you live past the 10 years, your payout benefits will continue as scheduled per the original terms of the contract.

When it comes to establishing an annuity account for yourself, it is advisable to speak to a professional in the field. As long as you know to ask about annuity forfeitures, they can help you set up an account to help lower the risk of this occurring in the future.

What is a Pure Life Annuity?

Posted in Annuity , Compare Life Insurance , Life Insurance , Life Insurance Claims , Life Insurance Riders , Permanent Insurance

April 17th, 2009
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Retirement planning is an essential task everyone must pursue in order to provide a level of financial comfort for themselves. One investment tool that is commonly used are annuities, where you pay a premium over an extended period of time in order to collect cash benefit payments at a later date. A pure life annuity follows that basic structure,and offers either fixed or variable payments until the annuitant perishes. At that point, the payment cycle is terminated.

Pure Life Annuities Can Be Risky

Pure life annuities have the potential of short-changing the estate of the investor. Generally a pure life annuity will pay out benefits to the policyholder until they die. Consider if set up an annuity that begins paying you upon your 65th birthday. Until that point, your life goal was socking away as much money as possible to help ensure that you would live comfortably when you retire. If you live another few decades, the pure life annuity could be of value, providing you with a steady stream of income until you die.

However, what if the pure life annuity payouts kick in as scheduled, but you perish prematurely and only after a couple of years of receiving your benefits? A pure life annuity will cease paying out any of your investment upon your death. A pure life annuity would only pay out a small amount comparable to the amount of investment contributions you made over your lifetime.

Add Clauses to Protect Your Annuity Investment

Pure life annuities come with the risk of your estate being short-changed from your original investment goal. If you want to ensure that a forfeiture is avoided, an added clause can help provide an additional level of protection. With additional verbiage to your annuity contract, it can be specified that the life insurance provider must make a required number of annual payments. If you outlive that period, the annuity payouts will continue. However, if you perish prematurely, your estate will be able to collect the additional funds before the clause date term expires.

What if an Annuitant Outlives Their Policy Term?

Posted in Annuity , Compare Life Insurance , Life Insurance , Life Insurance Claims

April 15th, 2009
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If you are a contract owner with an insurance company where you pay dues expecting a future payout, then you are an annuitant. Typically, annuity payouts are structured to start out at retirement, but the contract holder can really opt for distributions for any time period they choose. If you start your payout benefits earlier or live anexponentially long time, you may actually outlive the life of your policy. If that is the case, what happens when the annuitant outlives their policy term?

Annuity Account Stages

There are two basic stages to an annuitant account:

• Accumulation Period – the time in which a contract holder pays into the account
• Annuity Period – the time that the payout benefits starts and occur

The payment size is determined by the total account value including the total contributions made, interest gained and the life expectation of the annuitant. When the annuity is originally set up, the insurance company uses mortality tables to give their best estimate of how long you will be expected to live. It is harder to judge your life expectancy, but most life insurers will do so anyways. By assigning a life expectancy, they are able to establish when payments from your annuity will cease.

Value of Mortality Guarantees

Within annuity contracts, their is an act called forfeiture. That is when an contract holder dies prematurely to their expected “expiration date.” At that time the annuity becomes the property of the insurance company. The insurance company then uses that money to help make payouts to those who have outlived their policy length. As long as your annuity provides you with a “mortality guarantee,” you will receive payments for as long as you live.

What if an Annuitant Passes Away Before Their Term Expires?

Posted in Annuity , Compare Life Insurance , Life Insurance , Life Insurance Claims , Permanent Insurance , Term Insurance

April 14th, 2009
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People who get permanent life insurance are taking care of two important issues at the same time: they’re ensuring the financial safety of their loved ones in the event that they will die suddenly; and they’re planning for their retirement. A permanent life insurance policy has what’s called a cash-value factor. This means that, unlike term life insurance, all the money you put into your permanent life insurance policy (in the form of your premiums) starts to accrue, and goes into a fund which you can get back when you want to.

Using Permanent Life Insurance as a Retirement Strategy

Many people use their life insurance policy as a retirement strategy seeing as it means guaranteed income for them when they retire. The payments from the permanent life insurance policy are called annuities, and the person receiving them is called the annuitant. If you are wondering what would happen if an annuitant dies before their policy term, you can rest assured that there are measures you can take to ensure the protection of your funds.

One way to deal with this concern is by getting the life annuity. This means that the annuity will be paid for as long as you live. The annuity payment will stop coming the moment you die. So, in this scenario, your policy term equals your life span.

Naming a Beneficiary as a Precaution

You can also address your concerns about dying before your policy term by naming someone as the beneficiary to your permanent life insurance annuity plan. This person is very often a spouse or domestic partner. With this safeguard in place, you can be confident that your annuity will continue to be paid to the person you want to see benefit from it.

To learn more about annuities, permanent life insurance, or any other aspect of life insurance, be sure to consult with a life insurance professional.

What Happens to my Policy if the Beneficiary Dies Too?

Posted in Life Insurance , Life Insurance Claims

April 13th, 2009
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When you open a life insurance policy, you decide who receives the benefit of the policy after your death by choosing a beneficiary. From time to time, you can review your policy and add or change a beneficiary at any time.

It’s important to keep your beneficiary information up to date. However, under some circumstances, it is possible for your beneficiary to die before receiving the benefit of your life insurance policy. For example, what if you have named your spouse as the beneficiary of your life insurance policy, but both of you are killed instantly in a car or plane crash. What happens to your life insurance benefits in such a case? Who will claim the policy if your beneficiary dies before receiving the funds?

Different states have different laws regarding the line of descendants who are eligible to receive your life insurance benefits in the event that your primary beneficiary is no longer alive. However, what happens most often is that, if there is no contingency beneficiary, the insurance benefit becomes part of your estate. This can cause delays in disbursement of the proceeds, increased estate costs, and possibly probate action before the money reaches the individuals who you intended to receive it.

To avoid this kind of situation, it is considered wise to name a secondary, or contingent beneficiary. This individual will be your beneficiary in case of contingency for instance, in the event that your primary beneficiary is deceased before the life insurance policy is disbursed.

Naming a contingent beneficiary is an important safeguard to prevent the proceeds of your insurance policy from being tied up by probate action. You should be able to do this by completing a form which is typically called the “Designation of Beneficiary” form. Contact your life insurance agent to request more information about designating a contingent beneficiary.

Is My Life Insurance Policy Applied to Debts First?

Posted in Life Insurance , Life Insurance Claims

April 8th, 2009
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A lot of people think that when you die, your debts are instantly forgiven. Unfortunately, when it comes to secured debt like mortgages, auto loans and the like, this is not the case. The law on unsecured debt varies by state, but in most cases, your outstanding debts, as well as your assets, are considered part of your estate. Mortgages, auto loans and any other form of secured debt will be inherited by your surviving family along with your assets.

What Happens During Probate?

A part of your estate may be ordered to be paid to your creditors, as part of a process called probate. During probate, a judge will take a look at your will and determine whether the will is valid (this is usually a routine measure that simply verifies your will is legal). They will then determine the value of your estate. In the course of your estate valuation, the probate court may have your property appraised, and order your estate to pay any outstanding debts and taxes. Once the outstanding debt has been paid, any remaining property will be passed along to your heirs.

Life Insurance is Not Applied to Debts First

The good news is, your life insurance policy is not considered to be part of your estate. This money is passed on directly to your family, is not taxed, is not applied to debts, and is not counted as part of your estate in probate. One of the main advantages of having a life insurance policy is that proceeds from life insurance are treated separately from the probate process, which means that your heirs will be able to use it to pay off estate taxes, or any other outstanding costs. Your life insurance policy can be used to pay off debt, but it will not be applied to debts first by the probate court. Your life insurance benefits are there for your beneficiaries to use as they see fit.

Do Life Insurance Claims Expire?

Posted in Compare Life Insurance , Life Insurance , Life Insurance Claims

March 30th, 2009
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If filing a life insurance claim was on your list of priorities, yet you took a while to get to it, you may be wondering if youve run out of time to file. This is a natural concern because so many deadlines are placed on legal documents. So lets take a closer look at the time constraints on these types of policies.

Do Life Insurance Claims Expire?

Youll be happy to know that if you ever need to file a life insurance claim, but feel that youre running behind schedule because youve waited several months or even several years to file for the proceeds, its not too late. There is actually no deadline life insurance policies do not expire. However, when the time does come to file, you want to make sure that you have an original copy of the death certificate, along with proof that you are the beneficiary, to keep the process from taking any longer than it already has.

What if I Lose the Life Insurance Policy or the Insurance Company Was Bought Out?

So now you know that a life insurance claim does not expire. But what might happen if you lose the life insurance policy or the insurance company was bought out? Lets start with you losing the policy. If for some reason, you cannot find the policy and you are the beneficiary, there are ways that you can track it down. One way is by speaking with the insureds state department of insurance. Another way is by contacting the unclaimed property office. Or you can check for receipts or canceled checks to find the insurance companys name.

Now suppose youve waited several years to file, only to learn that the company was bought out. If this occurs, you can conduct a search online to find out what company bought out the insureds company. Or you can contact the department of insurance to see who the company merged with.

The good news is that now you know that your life insurance claim wont expire, no matter how long you wait. So, your next step is to make sure that when you do file, you have all of the documentation you need to make the process simple.