During a time of loss, it can be emotionally draining to try to deal with practical matters like financial arrangements, funeral arrangements, and life insurance policies. In many cases, relatives and loved ones are not aware of life insurance policies of deceased individuals; this can make it even more difficult to arrange financial matters and settle the estate in a timely manner.
In some instances, life insurance policies may go undiscovered for several months or years after the death of the insured party. This can produce additional problems for the beneficiaries, who may have to track down the insurance company in order to obtain the amount due. If the policies are not found and claims filed in a timely manner, it may be necessary to provide proof of death to the insurance company in order to collect on the life insurance policies of deceased persons.
Typically, only the executor of the estate or the beneficiary of the life insurance policy can obtain information about the coverage from the insurer; this is intended to safeguard the privacy of individuals and ensure that their financial and personal information is protected. However, it can present significant roadblocks to relatives searching for information on these life insurance policies; unless the inquiry comes from either the court-approved executor or a named beneficiary, then no information will be released.
In some cases, the life insurance policy may name a beneficiary who is also deceased, either before or after the policyholder’s death. If the beneficiary died first, then the entire life insurance policy will be added to the estate of the deceased and distributed in accordance with state laws governing inheritance. When the policyholder dies first and lists a contingent beneficiary as well as a primary beneficiary, the contingent beneficiary receives the proceeds of the policy in the event that the primary beneficiary dies before collecting on the policy. If no contingent beneficiary is named, then the estate must be reopened and the proceeds once again distributed in accordance with state law. It is obvious that estate management can be a complex and difficult process; however, it is necessary in order to gain closure on the financial matters surrounding the death of a friend, loved one, or family member.