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I'm fairly new to final expense sales. How are claims handled? I sell mostly RNA, and Liberty. Are claims paid in time to cover the cost of the funeral? How quickly do term life or whole life policies pay out for comparison?
What Happens when a Customer Dies?
- Thread starter hardworker
- Start date
- 16,880
They just need to take the policy to the funeral home. The funeral home will assign the policy to an assignment company and the assignment company pays the funeral home on the spot.
Doesn't matter what kind of life insurance. Any policy that has been in force over 24 months will work.
The key words are he's new. That means contestability if they die in the next 2 yrs. It could take 2-6 months for a decision wether to pay. I know settlers shows there overall claim paying record but i'd love Fe companies to post the % of contestable claims they pay. I've always wondered that.
- 16,880
I agree it should be mandatory.
- 24,966
What Newby and Petey said. However, some companies are slower than others even on noncontestible claims. Getting the funeral paid is just a piece of process unless that is all you sell. You mentioned term so I am assuming you do more than $15,000 burial plans.
Last year I had a client die who had two policies. United Heritage cut the full $35,000.00 checks less than 48 hours after death. Jackson National made them wait for the DC, which is usual, then it was another month or so. Oxford is much worse. Claims and service is more important to me than a few dollars difference in premium. I have heard SNL is quick on non contestable claims. I think Newby has said companies that also do Preneed pay quicker.
- 330
I had a client that recently died she had insurance with Monumental one policy was five years old the other was seven years . If it was just monumental they would have paid the claim within two weeks or less the husband called Transamerica and they said they pay claims between 30 to 90 days. In or out of the contestable period.
So does the assignment company charge a small % or fee to handle this and they wait to get the money from the insurance co?
- 16,880
Yes and yes.
Most charge between 3-4% fee. Usually the funeral home absorbs the fee.
Then they get paid back when the insurance company pays the claim.
Lets say the family brings in a 10k policy for funeral that costs them 8k do they have any concerns handing policy over to funeral home?
I am guessing funeral home would just cut family a check for difference after getting paid by assignment company, is this how it works?
