How to File a Life Insurance Claim
Credit Consolidation
Creating a Will

How to File a Life Insurance Claim

Filing a life insurance claim may be one of the most difficult things you’ll ever do--not only emotionally, but also in terms of the paperwork and time required. While nothing can make the process less traumatic, knowing in advance how it works can make it go more smoothly. With the following steps, you can more quickly and easily get through the claims process:

Step 1: Contact your insurance representative.

Start by contacting your insurance agent--they can tell you what is required for filing the claim, and help you understand how it works. If the person had a group life insurance policy through their job, contact their employer to start the claims process. Often, the human resources department oversees insurance, and can guide you through the claims process.

Step 2: Gather the required paperwork.

Determine what paperwork you need; usually, the insurance agent will tell you what documentation is required. You’ll need a copy of the death certificate, which you can get from the funeral director. You’ll also need the person’s birth certificate, and if there are ex-spouses, you may need a copy of your marriage certificate to establish your relationship to them. There is also a claim form provided by the insurance company, which must be filled out and submitted within a certain time period after the person’s death. And, you’ll probably need a form filled out by the physician. Because many people have insurance policies through their credit cards or mortgage company, you’ll need mortgage and loan paperwork, credit card statements, and employee benefits information, in addition to insurance paperwork. To make the process even easier, anyone with insurance should keep a file with all of this documentation, so their loved ones will have everything they need. And, make multiple copies, so that everyone involved in the claims process can have all of the paperwork in their own files.

Step 3: Find out what policy (or policies) included and what you’re entitled to.

Many people have several insurance policies in addition to their primary life insurance plan. They may have small, supplemental plans through credit cards, their job, or other sources, and many times these plans have different requirements and payout amounts. Some only cover travel-related or accidental deaths, for example, and some only pay a small amount. Find the paperwork for each plan, so you’ll know the claims process for each and how much money you should receive. Also, while some plans pay a lump sum amount, others use a payment plan. Sometimes this is decided by the insured, but in some cases the beneficiaries can decide. If this is left to the beneficiaries, consider both options to decide which works better for you. Many people prefer lump sum payments, because they are not subject to income tax, but in the case of children, installments are often preferred, so they won’t have to manage such a large amount of money.

Credit Consolidation

Consumers who are deeply in debt may see few options for reducing their credit card balances. However, by consolidating their credit card debts, many can dig out of debt faster and easier than they ever thought possible.

How Credit Card Consolidation Works

Credit card debt is made worse by a card’s APR, or annual percentage rate. As interest rates continually increase, a cardholder’s finance charges also increase, making the debt even steeper. Finding a way to reduce these interest charges can significantly reduce outstanding debt. That’s how credit card consolidation can help--by moving debt from high-interest cards to cards with low or no interest rate. Card holders can also take a debt consolidation loan, which can be used to pay off all of their credit holders. However, these don’t offer the special introductory offers of many credit cards.

Advantages of Credit Card Consolidation

Credit card consolidation is one of the most efficient ways to handle credit card debt, especially for people with good credit ratings. Credit card companies compete aggressively for new customers, and frequently special offers such as initial low interest or no interest for balance transfers, many times also eliminating the fee for balance transfers. Though these special offers expire, usually after six months or a year, they provide the cardholder with extra time to pay off debts. The money the cardholder saves on finance charges can be applied to the debt, helping get the debt paid off faster. In addition, having all of the debt in one place, instead of scattered among several cards and lenders, reduces hassle, and also reduces the chance of missed or late payments, because there is less to keep track of. Consolidating credit card debt reduces monthly payments, helping ease some of the burden of paying off high balances.

Consolidating on Your Own vs. Using a Debt Relief Company

Many consumers turn to debt relief companies or professional credit card consolidators to help them get out of debt. Some consolidators and debt relief companies provide counseling and advice, helping card holders understand their options and which is best for them. Some also negotiate lower fees and balances with creditors, or help clients obtain a second mortgage to help pay off debts. While many credit consolidation or debt relief companies provide much-needed guidance, others provide services clients could just as easily do themselves. If a client’s debt situation is not too complicated, they may be better off handling it on their own.

Creating a Will

It may be the most important thing you ever write: your will. Wills aren’t only for the rich or powerful; even the average citizen needs one to ensure their wishes are carried out after their death, and to help make the process easier for the people they leave behind. Creating a will is simple, provided you know what should be included, and what mistakes are commonly made.

What is a will?

A will is a statement of who you are, what property you own, and how you want that property to be distributed after you die. It begins with the statement that the person is of sound mind and body, and that he or she intends the document to be the last will and testament, overruling any previous wills. It usually names an executor, someone responsible for overseeing the person’s estate. A will is specific--it describes each piece of property, and outlines how much money or property each person should receive. You don’t have to use an estate planning attorney to help you draw up your will, although it is usually recommended. There are software programs that guide you through the process, as well as several websites that outline what a will is and how to write one.

Mistakes to Avoid

While creating a will is fairly simple, many people make mistakes that cost their estates thousands of dollars, or even make their wills void. To ensure your will is honored, avoid these errors:

Not including all of your assets in your will: Every asset should be included in your will, no matter how small. If you leave behind property not mentioned in your will, the state will determine where that property goes. To avoid this, many people include a residuary clause, which dictates how any property not specifically mentioned should be distributed. Another measure is to include provisions about what should happen if an intended beneficiary cannot inherit, for example, if they’ve died.

Not appointing an appropriate executor: Choosing an executor is an important decision, because they’re the ones who oversee distribution of your assets. Make sure it’s someone willing and able to carry out this duty. Also, specify what powers the executor has--such as the power to sell your assets. If you don’t specifically grant these powers, the executor’s rights may not be recognized.

Not updating your will: Updating your will is just as important as its initial creation. Things change--you may have children, get married or divorced, or you may acquire or dispose of assets. If your will does not reflect your current circumstances, you may inadvertently leave people out, such as children or a spouse. Or, if you’ve moved to another state, or your current state’s laws have changed, your will may no longer be valid.