Navigating Life Insurance Claims

Life insurance provides financial support to families for final expenses, debts, education, and bequests.

It can also ensure ongoing income to maintain the family’s standard of living.

Claims Process

The claims process is generally routine despite the emotional stress of the situation.

With the help of their financial advisor, beneficiaries typically need to complete a claimant statement, provide a death certificate, and may need additional documentation (like a doctor's letter or coroner’s report).

Some companies aim to pay out claims within 6 business days, with a high success rate. Quick processing can occur—sometimes on the same day such as a recent claim I helped process in the spring!

Receiving Benefits

Beneficiaries can choose how to receive the tax-free benefits of life insurance:

• Lump sum payment: direct deposit or cheque.
• Invest in a guaranteed Investment: GIC or high-interest savings account.
• Invesment account: for long-term growth.
• Regular income: monthly or yearly distributions.
• Annuities: regular income payments via life or term annuities.
• Combination of options: flexible arrangements can be made.

Special Considerations

If a beneficiary is a minor, a trustee is often designated to manage the funds until they reach adulthood.

Policyholders can impose restrictions (settlement options) on how funds are managed to prevent reckless spending.

Additional Considerations for Beneficiaries

Review other financial plans that need addressing after a death, such as Canada Pension Plan, Old Age Security, registered pensions, investment accounts and real estate.

Don’t overlook life insurance from employers or creditor life insurance tied to loans.

Tip for Claimants

Order multiple copies of the provincial death certificate but retain a few for personal records, especially if original documents are requested.

This structured approach not only helps beneficiaries navigate the claims process but also ensures they maximize the benefits available to them. If you have any questions or need further information, feel free to ask!

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