Important tips for claiming life insurance benefits

  • Insurance payouts are not probate assets and so the beneficiary, not the estate executor, claims their benefit. The executor might help you find the right documents.

  • Each beneficiary will have to contact the insurance company and fill out their own claim forms.

  • Life insurance usually pays in 15-60 days, unless there are unusual circumstances.

  • You can choose from one of several different payout options, each of which has its own benefits and drawbacks.

After someone close to you passes away, there are several benefits that you may be eligible for. These can often be a needed source of aid during this difficult time and a way to feel supported and comforted by your loved one even after they are gone.

Because most benefits are not probate assets, meaning they are not part of your loved one’s will or estate, claiming benefits is something that the beneficiary takes care of independently. Often, the executor of the estate can help with this, but it is ultimately the responsibility of the person who will get the benefit to handle the paperwork. 

Life insurance death benefits

If your loved one purchased a life insurance policy at any time before they passed away, they will have listed one or more beneficiaries. In general, one can put down any number of people as beneficiaries; you can also name an estate, a trust, or a charitable organization as a beneficiary.

Except when the estate itself is the beneficiary of the policy, life insurance benefits do not go through the probate process. This is because they are paid directly to the beneficiary, per a contractual agreement between the policyholder and the insurance company. 

Making a life insurance claim

When your loved one passes away, you will need to file a claim with the life insurance company. To determine how much you will receive, review your loved one’s life insurance policy. The policy itself should list the death benefit amount.

Even though the estate executor is not in charge of non-probate assets like life insurance, they can usually help you locate the life insurance paperwork if you are a beneficiary or believe you might be. If you are the executor, make sure to look for any life insurance documents while you gather important documents in preparation for probate. 

To start the claims process, get in touch with the life insurance company and notify them of your loved one’s death through their claim form. The company will then send you further instructions to access your benefits. Each named beneficiary needs to submit a claim, so even if multiple people are due to receive benefits, each one of the beneficiaries will have to go through this process. 

The life insurance company may require an original copy of your loved one’s death certificate, a copy of the life insurance policy, and your own government-issued ID. Make sure to have those documents ready to speed up the process.

Life insurance death benefits are often paid out relatively quickly. Once you have filed your claim and provided the insurance company with the required documents, you should receive your payout in as little as two weeks, up to about 60 days. However, some circumstances, such as if your loved one passed away within two years of buying the policy, may trigger an investigation that can delay payment.

You can receive death benefits payouts in several different ways. You may be asked tp choose one of the following at the time of filing, though there are sometimes more options.

Once you have filed your claim and provided the insurance company with the required documents, you should receive your payout in as little as two weeks.


Receive all your benefits at once in a single deposit. While this is the most common type of payout, it can also lead to some extra steps. Lump-sum life insurance payouts are tax-free and give you the most flexibility with how you choose to spend the money.

However, if you receive a large payout, you will need to spread it out over multiple checking accounts, as the FDIC, which insures bank deposits, will only cover $250,000 per depositor.

Installment payments

You can opt to receive 20% of the full death benefit amount annually for five years. The money that stays in the life insurance balance in between payments usually earns interest. While this gives you a payout structure, you will need to pay taxes on any interest the account has earned in the meantime.

Straight life income

Choose whether you would like to be paid monthly, quarterly, or annually, and the life insurance company makes sure that you receive money for the rest of your life, no matter how old you are. They estimate the remaining years you have to live, and determine your regular payments based on this.

The downside of this payout method is that if you pass away before the full balance has been paid out, the life insurance company will keep the money. Moreover, the younger you are, the smaller each payout will be. 

Should you decide at any point to stop receiving income payouts and take the cash, you will have to pay a kill fee. 

Period certain life income

To avoid the risks of a straight lifetime income payout, the period certain payouts allow you to set a time limit for payouts. For example, the life insurance company must pay you income (at your frequency of choice) for 25 years after the death of your loved one. 

If you pass away before that time is up, the insurance company is contractually obligated to continue its payouts to a contingent beneficiary.


In this case, you would only receive the interest generated by the life insurance policy. One of the advantages of this method is that you do not have to worry about the FDIC limit. However, interests from a life insurance policy may not be as high as those from a high-yield savings account, and you need to pay taxes on any interest.

Retained asset account

Similar to an interest-only option, in this scenario the insurance company leaves your payout in an interest-bearing account as well, but you get a checkbook that allows you to use the money in the account when you want it. The advantages and disadvantages are the same as those of interest-only payouts, with the added benefit of being able to draw on the funds until they are gone.

Talk to the insurance company about which options they offer and what is best for your situation.

Using the proceeds of life insurance death benefits

There is no right or wrong way to use life insurance proceeds. It is important to note that life insurance payouts are not considered taxable income. However, if you choose a payout option that earns interest over time, you will need to pay taxes on that interest. 

Most people will use the life insurance money to pay off debt, invest in their future, and ensure their family's long-term security, but it is entirely up to you how you want to use the funds. 

Social Security benefits

Another very common source of benefits for survivors is Social Security. Each year that your loved one worked and paid Social Security taxes, they earned credits. These change over time; in 2021, a worker earns one credit for each $1,470 in covered earnings, up to 4 credits a year. 

To qualify for Social Security survivors benefits, your loved one must have earned at least 40 credits during their lifetime, so they must have worked and paid into Social Security for at least 10 years. Your loved one may have earned much more than the number of credits necessary for eligibility, but this does not affect the benefit amount.

Social Security survivors benefits should not be confused with the Social Security death benefit, which is a lump sum payment of $255, generally intended to help with funeral costs. Your funeral home will typically inform the Social Security Administration about your loved one’s death, which automatically triggers the $255 death benefit. The eligibility requirements for this payment are similar to those for survivors benefits, but they are not identical.

There are different types of survivor benefits, though only surviving spouses, dependent children, and some ex-spouses can claim them, and only if they meet certain criteria.

If you were receiving Social Security benefits from your loved one before they passed, notifying Social Security of your loved one’s passing will automatically trigger your survivor’s benefits. If not, you will need to call the Social Security Administration at 1-800-772-1213, start an application online, or visit your local Social Security office, if it is open. In many cases, you will be required to meet with a Social Security agent. Once that has happened, you will start receiving Social Security benefits as a continuation of income. 

You will need to provide: 

  • A death certificate

  • Your birth certificate or other proof of birth

  • Proof of U.S. citizenship or lawful alien status if you were not born in the United States

  • U.S. military discharge paper(s) if you were in military service before 1968

  • For disability benefits, the two forms (SSA-3368 and SSA-827) that describe your medical condition and authorize the disclosure of information to the SSA

  • W-2 forms(s) and/or self-employment tax returns for last year

  • For surviving spouse benefits: marriage certificate

  • For a surviving divorced spouse: a final divorce decree and a marriage certificate

Contact your local Social Security office for detailed information about the paperwork you need to provide for your unique situation.

Other benefits

You and your family may be eligible for other benefits, including worker’s compensation benefits, pensions or annuities, veterans benefits, FERS survivor benefits, and many others. The relevant organization or employer will be able to give you detailed information on how to present your claim.

When someone you love passes away, it can be challenging to make ends meet. Benefits programs can help you and your family reorient yourselves to continue your life on stable ground.

You may be eligible for free bereavement support. Empathy can help with everything from funeral planning to estate administration, with step-by-step guidance and real-time expert support. Many people get free premium access to Empathy as a benefit with their life insurance claim. We partner with New York Life, Guardian Life Insurance Company, Bestow, Lemonade, and other leading carriers. When you make your life insurance claim, talk to your representative about whether Empathy is a benefit they offer.