How a payout works

First week

• Order several certified copies of the death certificate — every institution wants one and copies are harder to get later
• Find the policy or declarations page; the claims number is on it
• Call the insurer and open the claim
• Ask what each beneficiary needs to submit
• Don't cancel other policies or accounts yet

What the insurer needs

• A claim form from each named beneficiary
• A certified death certificate
• The policy number
• Identification for each beneficiary
• Sometimes additional records, particularly for a death within the contestability period

How the money can be paid

A lump sum is the default and the simplest. Insurers commonly also offer a retained-asset account they hold and pay interest on, and various instalment or annuity settlement options.

The death benefit is generally free of federal income tax; interest on money the insurer holds generally isn't. That difference alone is worth understanding before electing anything other than a lump sum.

There is rarely a reason to decide quickly, and several good reasons not to.

If a claim is contested or delayed

A death within the contestability period usually triggers a review of the original application against medical records. That's standard and adds time rather than signalling a problem.

Where beneficiaries dispute entitlement, an insurer may pay the money into court and let the dispute be resolved there. If a claim is denied, ask for the reason in writing and take it to your state insurance department, which costs nothing.

If you think a policy exists but can't find it

The NAIC operates a free Life Insurance Policy Locator. You submit a request and participating insurers search their records for policies on the deceased, contacting the beneficiary if a match is found.

Also search state unclaimed property programmes. Where an insurer cannot locate a beneficiary, benefits are eventually turned over to the state, and those databases are free and searchable.

Both are free, both are underused, and money genuinely sits unclaimed in them.

Where else to look

• Bank records for premium payments to an insurer
• Tax returns showing interest from an insurer
• Employer and former employer benefits departments
• Unions, professional associations and alumni groups
• Mortgage and loan files, for credit life coverage
• Address books, safe deposit boxes and email for insurer correspondence