How Does Life Insurance Work?In order to understand the process of making a claim under a life insurance policy, it is important to first understand the various individuals who are involved in the process, as well as their specific roles. When it comes to life insurance policies in Texas, the following individuals are key:
- The insured – The insured is the individual who takes out the life insurance policy – usually through his or her employment. When the insured decides to take out a policy of life insurance, he or she must designate one or more beneficiaries to eventually collect on the policy. Over the lifetime of the policy, the insured makes premium payments, typically on a month-to-month basis. The insured’s death is the triggering event for the beneficiary to make a claim under the policy.
- The beneficiary – The beneficiary is the individual who makes a claim under the policy when the insured passes away. Once the insurance company accepts the claim, the beneficiary is entitled to a payout. The amount of the payout depends upon the value of the life insurance policy which the insured took out.
How Does a Life Insurance Policy Beneficiary Go About Making a Claim for Benefits under the Policy?The life insurance policy will set out the steps that the beneficiary needs to take in order to make a claim under the policy. Generally, to make a claim, the insured must do all of the following:
- Notify the insurance company of the insured’s death within a specific period of time
- Provide the insurance company with proof of the insured’s death, such as a copy of the death certificate stating that the insured has passed away.