Why Some Policies Get Delayed After Death (And How to Prevent It)

Claims should be simple: someone passes, the carrier reviews the file, and your family gets paid. Most claims do move quickly. I’m a licensed life insurance agent, and I’ll show you why delays happen, what sets off extra reviews, and the exact steps that keep money flowing when your family needs it.

The five big reasons claims get stuck

1) Paperwork gaps and missing proof

Carriers need the claim form, a certified death certificate, and the beneficiary’s ID. If names don’t match, a middle initial is missing, or the policy number is unknown, the file bounces around.

Prevent it

• Keep a one-page “break-glass” sheet: policy number, carrier phone, my contact, owner/insured names, and where the PDF lives.
• Store two certified death certificates in advance? You can’t pre-order, but you can list who will request them and how many you’ll need. I tell families to plan for 6–10 if there are multiple accounts and benefits to settle.
• Match legal names and addresses on the beneficiary form now so IDs line up later.

2) Contestability review (first 2 years) or reinstatement

During the first two years after issue—and again for two years after any reinstatement—the carrier can verify application answers. If something material is missing (unreported nicotine, a major diagnosis, DUIs), the review expands.

Prevent it

• Be candid on the application. If you remember a detail afterward, email an addendum so it’s on record.
• Avoid lapses; reinstatement can restart the contestability clock for the statements you make during that process.
• Keep your primary care records tidy. If a review happens, clean documentation speeds it up.

3) Cause-of-death flags

Certain causes trigger extra steps: homicide, accidents under investigation, deaths during the suicide clause period, or cases needing a medical examiner’s report. Carriers may wait for official documents.

Prevent it

• You can’t control investigations, but you can control readiness. Keep beneficiary designations clean and ownership clear so the carrier isn’t juggling other issues while they wait on officials.
• If you handle claims for your family, gather the ME report, police report number, and funeral home contact as soon as you can. Submitting them with the claim shortens back-and-forth.

4) Beneficiary or ownership problems

This is the delay I see most often. Examples: no contingent beneficiary, minors listed directly, “estate” named by default, an ex-spouse still on file, or a bank assignment that was never released.

Prevent it

• List primary and contingent beneficiaries with full legal names and percentages totaling 100.
• For minors, name an adult custodian under UTMA/UGMA or point the policy to a trust.
• If you want a child’s share to flow to their kids if that child is gone, mark per stirpes.
• If a lender ever held a collateral assignment, file the release; keep a copy with your policy.
• Keep owner and payer details current.

5) Money math inside the policy

Loans and certain riders can slow a claim while the carrier reconciles numbers. With whole life and UL/IUL/VUL, large loans reduce the payout and can create tax steps if the policy recently lapsed. With Return of Premium (ROP) term, missed payments or changes can affect the refund rules.

Prevent it

• Keep loans modest and reviewed yearly; know the loan rate and whether loans affect dividends or index crediting.
• For UL/IUL/GUL, order an in-force illustration each year so there are no surprises about guarantees or balances.
• If you own ROP term, keep payments clean and on time.

What fast claims look like (from the carrier’s side)

Clean file + clear beneficiaries + straightforward cause of death
→ Claim form + certified death certificate + ID
→ Direct deposit in days to a couple of weeks, depending on the carrier’s cycle.

Files that take longer often sit in one of these bins:

• Contestability review (up to 2 years from issue or reinstatement)
• Homicide/accident with open investigation
• Beneficiary dispute or missing contingent
• Complex ownership (business or trust) without current documents
• Large policy loans that require reconciliation

Set your policy up to pay fast: the 20-minute tune-up

1. Open your policy PDF and confirm: owner, insured, face amount, and riders.
2. Beneficiaries: add a contingent, fix spellings, set percentages to 100, choose per stirpes if you want that flow-down protection.
3. Minors: change “my kids” to a named custodian or trust.
4. Assignments: if you once pledged the policy to a bank, ask for a release letter and file it.
5. Billing: note draft date, grace period, and monthly vs annual.
6. For whole life: confirm Automatic Premium Loan (APL) setting and note the loan balance and rate.
7. For UL/IUL/VUL/GUL: request an in-force illustration and keep the latest copy.
8. Break-glass sheet: carrier phone, policy number, my contact, and instructions for your spouse/partner on where papers live.

Send me a snapshot of your answers; I’ll flag any weak spots.

What to file on day one (copy/paste checklist)

• Claim form (carrier-provided; fill every line)
• Certified death certificate (include one with cause of death visible)
• Beneficiary ID (driver’s license or passport)
• Policy number and copy of the policy face page if handy
• Any collateral assignment release, if one ever existed
• If applicable: medical examiner report, police report number, funeral home assignment form
• Direct deposit form with routing/account (to avoid mailed checks)

Pro tip: ask the funeral home which documents they can transmit for you; many will send the first packet while you’re handling family arrangements.

If you’re inside the contestability window

Expect a short questionnaire and medical record requests. Speed things up by:

• Listing all doctors and facilities with addresses and dates
• Signing HIPAA releases promptly
• Sending any recent labs or visit summaries you already have
• Keeping my number on the claim so I can chase status and nudge items through

Special setups that avoid headaches later

Term with conversion flexibility

• Note the conversion deadline and eligible permanent menu now. If health changes, converting a slice in time locks a lifetime base with no new medical questions.

Business-owned policies

• Keep corporate documents, buy–sell agreements, and any premium-sharing records handy. Mismatched paperwork is a common slowdown.

Trusts

• Store the relevant trust pages (name, date, trustees, powers). Carriers don’t need your whole binder; they do need enough to verify authority.

Common myths

• “The claim always takes months.” Most clean files pay quickly. The longer cases usually have paperwork or investigation hurdles that were avoidable.
• “The will controls everything.” Claims follow the beneficiary form, not the will.
• “A missed payment last year doesn’t matter if I caught up.” If the policy lapsed and was reinstated, contestability can restart for the statements made during reinstatement.
• “Naming ‘my estate’ is safer.” That choice often pushes the payout into probate and slows everything.

Real mini stories

Minor named directly
A parent listed a 10-year-old as primary. Claim stalled pending court instructions. We could have avoided that by naming an adult custodian or trust. Fix yours now if you see a minor listed.

Old bank assignment
A small business paid off a loan years ago, but the collateral assignment wasn’t released. The claim waited until the bank signed off. One two-paragraph release filed during life would have saved weeks.

Contestability, clean outcome
A claim four months after issue triggered a review. Because the application matched the records and the family submitted the ME report with the claim, the review wrapped and paid without drama.

Your pre-claim “go bag” (save this in your notes)

• Carrier name, phone, and mailing address
• Policy number
• Owner/insured names and DOBs
• Beneficiary names, DOBs, and percentages
• Draft date and grace period length
• For WL: APL status, current loan balance, loan rate
• For UL/IUL/GUL: last in-force date and next review reminder
• Any assignment release letter
• Contact info for me and your attorney (if a trust exists)

Share this with your spouse or partner. Fast claims happen when details are at hand.

What I’ll do for your family at claim time

1. Call the carrier with you and open the claim the same day
2. Send the exact forms prefilled where possible
3. Coordinate with the funeral home and request the right number of certified death certificates
4. Package ME or police reports if needed
5. Track the file weekly and push for updates in writing
6. Troubleshoot beneficiary or ownership hiccups so money lands where it should

My role is to make a hard week simpler and keep the payout moving.

Ready for a 15-minute claim-readiness check?

Send me: carrier, policy type, who’s listed as owner and beneficiaries, and whether any loans or assignments exist. I’ll reply with a short punch list, fix the forms with you, and set reminders so your policy pays fast when it’s needed most.