Are You The Beneficiary of a Life Insurance Policy?

If a family member or friend tells you they have made you the beneficiary on their Life Insurance policy, you may be able to file a claim upon the death of the insured and receive the death benefit. The death benefit is paid to the beneficiary when it is determined that a valid claim has been made.

How Much Time Do I Have to Claim the Life Insurance Death Benefit?

There typically is no limit to file a claim for a death benefit. However, if your initial claim is denied, there may be time limits in which to dispute the denial. Once filed, insurers in most states have 30 days to review the claim before responding. Depending on what is listed on the death certificate, there may be an investigation into the circumstances surrounding the insured's death. While there is technically no time limit restricting the application or collection of life insurance benefits, it's recommended you do so as soon as possible.

The life insurance claims process will typically take 30-45 days to complete. Even if you were unable to locate the policy or didn't know your loved one had an life insurance policy when they passed, you'll collect payment so long as:

• The policy was in effect
• All premium payments were up to date
• The information provided on the life insurance policy is both accurate and truthful

What If My Life Insurance Claim is Rejected?

In some cases, claims against a life insurance benefit may be rejected, and the policy terminated. If this happens, the premiums that were paid in for the policy will usually be reimbursed to the deceased's estate, or in some cases to the beneficiary. Insurance policies typically have a contestability period that starts when the policy goes into effect and runs for two years after.

Approximately 20% of claims filed² during the contestability period are rejected, after which the rate of claims rejection drops to 3% or less.

Reasons for rejecting claims generally fall into four categories:

• Suicide - If the deceased's cause of death is ruled a suicide, life insurance benefits often won't be paid out if the death occurred less than two full years after the policy was initially purchased.
• Homicide - If the cause of death is ruled a homicide, life insurance benefits will typically be withheld until the beneficiary is officially cleared from all wrongdoing. If a beneficiary is found guilty of homicide, the payout will go to a secondary recipient or revert to the estate.
• Fraud - If the deceased is found to have provided misleading information about their life risks when purchasing the policy — such as hiding the fact they regularly take part in base parachute jumping — life insurance benefits may be denied on the grounds of the risk not being disclosed and subsequently not factored into the insurance policy premiums.
• Non-Accidental Death - An accidental life insurance policy will only pay out if the policyholder's death is ruled accidental. In this case, a natural death, death by suicide, or death by homicide would be grounds to reject a claim.

The life insurance claims process can be delayed or terminated based on any of the above circumstances.

Does the Life Insurance Beneficiary Get All the Life Insurance Money?

Yes. Life insurance policies typically require there to be only one primary beneficiary on a policy and that beneficiary will receive the full life insurance payout.

What is a Secondary or Contingent Beneficiary?

A secondary beneficiary, also called a contingent beneficiary, is a person designated as a back-up beneficiary. In the event that the primary beneficiary passes away before the insured, the life insurance payout will go to the secondary beneficiary. If the primary beneficiary is still living when the insured passes away, the secondary beneficiary will not receive a payout.

Should I File a Claim as a Life Insurance Beneficiary?

Yes, as the life insurance beneficiary, it is your responsibility to file the life insurance policy claim. To learn more about filing a claim and receiving your life insurance payout, click here. If you believe you are the beneficiary of a life insurance policy and the insured has passed away, or if you have questions about how to file a claim with American General Life, we are here to help. Contact us at 1-800-888-2452.

If you are interested in finding out more about life insurance policy options, visit our Life Insurance Products page or call 800-294-4544 to speak to an agent.