Is There A Time Limit On When A Life Insurance Policy Can Be Cashed In?
Posted May 30, 2009 – 6:38 am in: structured settlements FAQMy grandmother passed away last year and my dad is the beneficiary of her life insurance policy. He’s still in denial that she’s gone, so he still isn’t going anything with any of her assets. I’m worried that if he waits too long that there may be some restriction on how long he can wait to cash her life insurance policy. Does anyone know if you can wait as long as you want or if you have to do it within a year or longer?
Tags: Cashed, Insurance, Life, Limit, Policy, There, Time, When
3 Comments
You can wait as long as you want as long as the premiums are still being paid, or is it paid up?
You can call the insurance company and let them know she has passed away. They will send the beneficiary the paperwork to sign and return back to them along with the death certificate. You can call them and at least get the ball rolling.
There is no time limit. But things can get more complicated if the policy cancels or if something happens to your dad and there is no contingent beneficiary named.
So, its just better that you call and get the death claim going. It makes life easier for everyone.
To answer your question succinctly, there is no time limit–you can cash in the policy 20 years later, provided the insurance company is still solvent. This assumes that you are talking about a term life policy, and not a whole/universal life policy, which might require payments of some sort to continue accruing. The quickest answer is to call the insurance company, explain to them the situation and they’ll help you to facilitate the rest. They’re required by law to pay the policy to the beneficiary, so there’s no worries there.
First off, contact the company to alert them that the insured has passed away. Your father will have to fill out a “proof of death” form and submit it to the company that issued the life insurance policy. A copy of the death certificate will be required as well. Once the company is on notice that there is a claim there is no specified period of time in which the claim has to be finalized.
Second, do not continue to pay premium on a life insurance policy covering an insured who has already passed away.