The sudden death of a loved one can be a devastating and tumultuous time for the aggrieved and thinking about filing a life insurance claim during this time can only add to those feelings of grief. However, beginning the process of making a life insurance claim shouldn’t be seen as a finality of what has transpired but rather as a tool to help you during this difficult period.
The process for making a life insurance claim in Canada is fairly straightforward. Once you acquire the death certificate for your departed loved one you can contact the life insurance company that holds the policy to file the claim. Remember a life insurance company will never automatically payout a death benefit unless it has been claimed for by the beneficiary.
In this article, we will go over the process of how to make a life insurance claim in Canada and also explore some of the dos and don’ts of filing a life insurance claim.
How To Make A Life Insurance Claim In Canada? 5 Easy Steps!
Life insurance is an agreement designed to financially protect the beneficiaries of a policyholder after they are gone. There are two common types of life insurance including term life insurance and permanent life insurance.
Regardless of what type of life insurance policy your departed loved one had, the process of making a claim stays largely the same. We have boiled the process down to 5 steps to help you make a life insurance claim as easily and efficiently as possible.
- Determine & Contact The Insurance Advisor or Broker
Policyholders need to share the fact that they have a life insurance policy with their appointed beneficiaries. This is because if the beneficiaries don’t know a life insurance policy exists they won’t file for a claim meaning that those death benefits will go unclaimed.
A life insurance company won’t make any efforts to contact beneficiaries on their own and unless a claim is filed they likely won’t even know that a policyholder has passed away.
If as a beneficiary you know a life insurance policy exists and through what provider this step becomes a whole lot easier. All you will have to do is get in touch with the insurance company and they will guide you through the procedure for filing a claim.
However, if you believe your deceased loved one had a life insurance policy but don’t know through which provider it was there are a few ways you can find out:
- Look through the financial records or bank statements of your loved one to see if any premium payments were being made to an insurance provider.
- Dig through paperwork, such as income tax records, to find any letters or mail from insurance providers
- Emails are another great place to look to see if there have been any notices for annual premiums
- Check with their employer to see if they had a group life insurance policy
- Even if you can’t find the policy itself but have found sufficient evidence that one exists, don’t hesitate to call the insurer.
- Gather The Required Documentation (Death Certificate)
The most important documentation required for filing all life insurance claims is a certified copy of the death certificate of the policyholder. To get a certified copy of the death certificate simply contact the appointed funeral director and they will be happy to assist.
The next set of documentation you will need are claim forms that can usually be downloaded online from the insurance provider’s website. If an online option doesn’t exist contact the insurance company and one of their representatives will send you the forms via mail.
- Review The Policy & Fill Out The Claim Forms
It is essential to always review the policy carefully and make sure you are aware of all the key terms and conditions that the policy entails. Consult with your financial advisor to make sure there are no potential exclusions to the policy that may impact the claim.
Once you are satisfied with the terms and conditions of the policy it is time to fill out the claim forms. These forms will require basic information such as:
- Name of the policyholder
- The date of death
- Place of death
- Cause of death
- Name of the beneficiary
- Decide How You Would Like To Be Paid Out
Again, it is best to consult with a financial advisor when choosing how you should get the life insurance payout. In Canada, you typically get four options:
In this option, the beneficiary gets all the amount at once, tax-free.
The death benefit is paid out over a set period. Any interest earnings are taxable.
The beneficiary can choose to simply earn interest on the policy and forgo the death benefit to a different beneficiary when they die. Taxes would apply to any interest income but not the death benefit.
Pays out a set income for life. However, the income amount would vary depending on the amount of the death benefits, and the beneficiary’s age and gender.
- Triple Check Everything & Submit The Claim Forms
It is now time to go over everything and make sure all the documentation and forms are correctly filled out and certified. Submit the documents online, or via mail and you are done!
What Happens After Receiving The Claim Decision?
Your life insurance claim can either be approved or denied. In some cases, the insurance provider might ask for more supporting documentation.
If your claim is denied you have two options. You can either take steps to appeal the decision or seek legal assistance.
If the claim is approved make sure the insurance company distributes the payout according to your specifications and also consult with a financial advisor or tax advisor to see if there are any tax implications of you receiving a life insurance benefit.
Consult With Wealth Preservation & Asset Management Experts!
If you require assistance with making a life insurance claim or have questions regarding life insurance policies, don’t hesitate to contact McIver Insurance. We are the most trusted life insurance brokerage company in Nova Scotia and are always here to help!