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A Tale of Three Death Claims

Afternoon faded into evening as the line of people queueing up to pay their respects continued through the funeral home. I had been standing by the casket for hours on a 95-degree July day. Although I was tired, the sight of everyone who had come to pay their respects to my father kept me going. I was especially surprised at how many people whom I had never met before took the time to introduce themselves and say a few kind words about my dad.
One of those unfamiliar people came up to me, quietly shook my hand and told me his name. Then he said that he had been my father’s life insurance agent and discreetly handed me his business card. “When you’re ready, please call me and I will help you with filing a claim and answer any questions you have,” he told me. We chatted briefly about my father and then he left.

So began my experience as the beneficiary of a life insurance policy. In all the years that I worked among life insurance agents, I had heard so many of them say they rediscovered their purpose for being in the business every time they had to deliver a death benefit to a grieving family member. Now I was about to find out what it was like to be on the receiving end of that delivery.

As each person’s life is unique, so is each person’s death. Also unique is each beneficiary’s need for money after a family member’s death. For some beneficiaries, the need for the funds provided by life insurance is a matter of survival. For others, the need is not as critical, but still important. At the time of his death, my father had been widowed for a number of years and his children were grown. So although nobody needed money to pay for daily living expenses, that life insurance money came in handy for a number of purposes – some we had anticipated and others we had not.

In the weeks that followed my father’s death, I discovered that he actually owned three life insurance policies. One had been purchased through the agent who introduced himself at the funeral home. Another had been purchased decades earlier through a fraternal organization to which my parents had belonged for much of their lives. The third had been bought in the course of some retirement planning and investing done through a bank-based financial advisory firm. Each of the three life policies brought a different claims experience as well – some aspects satisfying and others downright irritating.

I first called the agent who came to the funeral home. He carefully outlined all the steps I would have to take to file for the death benefit, making sure I understood everything. He promised to get the application paperwork sent to me (and my co-beneficiary sister) as quickly as possible, and he promised to oversee the entire claim procedure. He reassured me that he would take a personal interest in getting our claim processed. We received the paperwork shortly thereafter. We completed it and returned it along with a death certificate.

A few days later, I received a call from the agent. He had our check. This is where things became irritating.
I wanted him to mail the check so that I could pay the funeral bill. He insisted that he wanted to meet with my sister and me to give us our checks personally. That was all well and good, but my sister and I both live more than a two-hour drive from him, and we did not want to miss a day of work and drive four hours round trip to pick up checks. Not to mention that we suspected he might also want to use that meeting to advise us to invest some of the proceeds with him. I nicely but firmly replied that I needed the funds to pay bills and that I already had been working with my own financial advisor for years. So please just put the check in the mail. He did and we received the check in time to cover the funeral home bill.

I realize many beneficiaries have never handled a large sum of money before, and they might be overwhelmed with what to do with a check for thousands of dollars. They need an advisor to sit down with them and map out a plan so they don’t burn through all that cash. But other beneficiaries might already have an advisor and might already have a clear plan for the funds. Implying that you don’t think they’re capable of managing those funds doesn’t do you any favors in the long run. Also, beneficiaries who live a distance away are already run ragged with all the things they need to do relating to the funeral and estate-settling activities. Don’t attempt to force them into a trip and a meeting they don’t want. My point is, it doesn’t hurt to ask the beneficiary a few questions about what is going on with them and find out how they really want to receive their funds. And then listen to what they tell you.

“Frustrating” is how I would describe the experience filing a claim for the insurance purchased through the bank-based advisory firm. To begin with, nobody from that firm ever reached out to us. I found out about the policy when a bill for the premium arrived in my dad’s mail (which had been forwarded to me following his death). Even more frustrating – there was no telephone number or contact information anywhere on this bill. I did an online search and found a toll-free number for the bank’s main office. It took several attempts before I was able to speak to an actual human being on the phone. And then she had to refer me to another office. And the person in that office had to refer me to yet another office.

The paperwork was sent, filled out, sent back. But instead of receiving an actual check in the mail, I received one of those “checkbooks” that allow you to keep the funds in a money market account and write “checks” to pay bills. I hated this. Why not just give me a check and let me decide how or where to deposit the funds? I can understand if a beneficiary isn’t comfortable handling a large sum of money, doesn’t have their own bank account or needs some time to decide how or where to spend the funds. But again, each beneficiary has a different level of financial literacy and a different plan for using the money. Don’t treat them like you think they’re financial idiots. Give them a choice of how they want to receive their funds.

The easiest and most satisfying claim experience was when I called the fraternal organization. The sweet-voiced woman on the other end of the line expressed her condolences and asked me how my family and I were doing. She noted that my dad had been a long-time member of the group and that she appreciated his membership. She instructed me to mail in a death certificate, and I received a check the following week.

Throughout this experience, I was grateful for the professionals who advised my dad to buy the life insurance and keep the policies in force over the years. Your older clients who are single and no longer have dependent children might be tempted to give up their coverage in an attempt to save money. They may believe that leaving their heirs a house or some stocks and bonds or some money in the bank is just as good as leaving them life insurance.

But investments can go bad. Unplanned expenses can deplete a bank account. It can take months or years to liquidate real estate. Taxes can take a bite out of all these. What remains constant and readily accessible? Life insurance.

Settling an estate can cost money. In addition to paying for funeral expenses, we had a lot of unexpected expenses related to my dad’s house. It took more than a year before the house was sold. In the meantime, we had to replace the roof, repair the furnace, get the interior painted and cleaned in preparation for the sale, maintain the yard, arrange for snow and garbage removal, and keep the heat on and utilities connected. Not to mention that we made countless 300-mile round trips in the process of cleaning out the house and settling the estate. Gas, tolls, meals – they added up. It was nice to know that we had a source of cash to rely on during that time.

Selling insurance defies a one-size-fits-all approach. Each client has a different need and a different sales approach that works for them. Each beneficiary has a different need as well. A one-size-fits-all approach to paying their claim can impose a layer of frustration on an already stressful situation – and possibly cost you a future client.

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Follow her on Twitter @INNsusan. Contact her at [email protected].

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