When Does the Life Insurance Start to Kick in Upon a Spouse's Death?
- You must claim the death benefit. Contact your spouse's life insurance company and requesting a death benefit claim form to do this. Then turn the death benefit claim form into the insurance company along, with a copy of the death certificate. If you don't have a copy of the death certificate, the funeral home that provided the funeral services should give you a copy. Alternatively, you may obtain a copy from your state's office of vital records.
- Without claiming the death benefit, you will never get the money from your spouse's insurance policy. Most states have time limits on when the insurer must pay the death benefit out after you've submitted all of the necessary documentation. You must submit the documentation, however. Some states force insurers to pay interest on the death benefit amount until you claim the death benefit. Though this might provide you with a little more money if you wait, there's no good reason to just let the policy sit if you need or want the money. Each state's laws are different on required processing times, but many states will indicate a specific processing time by which the insurance company must comply, such as "within 30 days." If your state specifies the processing time, then you will receive the death benefit claim within that period after you submit all of the necessary paperwork to the insurance company.
- Your spouse's life insurance policy is income tax-free. This means you get all of the money from the death benefit. You may spend this money any way you choose. The death benefit also is paid directly to you, rather than going through probate. This speeds up the time it takes for you to get the money in your hands.
- If you do not claim the life insurance proceeds, there is a chance the insurer will transfer the money to your state's unclaimed funds office. If they find out your spouse has died, but you haven't claimed the death benefit after a long period of time, such as 12 months or more, then you might have to file a claim with the state. Keep in mind that your claim will be slowed down if you don't submit all of the required paperwork, or if the form contains missing information. Forgetting to sign the death claim form, or forgetting to attach a copy of the death certificate, will also prevent your claim from being processed. A life insurance agent from the issuing insurance company can help you file the claim if you think you need help.