What you need to tell your beneficiaries about your Life Insurance policy
According to a recent Harris Interactive poll, 91% of life insurance policy holders have spoken to their beneficiaries about their policy. However, 57% of them have not told their beneficiaries where the policy is located, which could pose potential problems when a claim needs to be filed.
If you currently own a life insurance policy or are considering taking one out, it is a good idea to think about what information your beneficiaries might need to know should they one day need to make a claim.
The first and most obvious thing is that they need to know the policy exists and who the beneficiaries are. If they don’t know it’s there, they won’t be able to make a claim and it may be hard for the insurer to track them down, particularly if you, like 20% of the Harris Interactive respondents, have been a little bit relaxed about keeping insurers up to date with beneficiaries’ contact details.
Your beneficiaries also need to know where the policy documents are located. This will make the process much easier in the event of a claim being necessary. It is a good idea to ensure documents are clearly marked and kept in a safe place.
The name of the insurer and the insurer’s contact details are also useful information to provide to your beneficiaries. If at the time of the claim the policy documents are unavailable, at least the beneficiary will be able to contact the insurance company and seek advice from them.
Lastly, it is important that your beneficiaries are made aware of the procedures for filing a life insurance claim. Claims are usually made at a distressing time and not knowing what to do, who to speak to, or where to find your documents can add to the distress.