Almost all insurers offer life insurance policies. And although each company has particular benefits and requirements, there are certain conditions that are met – by law and by the nature of the insurance – in a global way.
Know the specifications of life insurance, when they are paid to the beneficiary and in which cases the insurer could be exempted from payment, even if the accident occurs.
Usefulness and benefits of life insurance
The life insurance – like any other insurance policy is nothing more than a contract whereby the insurer agrees to pay one or more beneficiaries an amount of money if the holder dies, and he undertakes to pay an annual premium to the insurance company.
Before entering fully into the key factors of this type of policy, it is necessary to clarify the following points:
- The policyholder is the one who is obliged to pay the premiums to the insurance company. It may be the policyholder, but also a third party. For example, a husband could acquire a life policy for his wife. The owner would be the wife and the beneficiaries of the insurance, the people she designates
- The beneficiary is to whom the insurance company will pay in case of death of the holder. The number and identity of the beneficiaries are chosen by the insured. Following the previous example, the beneficiaries could be the children of the marriage
Now, life insurance can cover one or more aspects. This will depend exclusively on the conditions described in the insurance policy. However, the most common – leaving aside the amount to be paid to the beneficiaries – are:
- Funeral expenses
- Debts of the deceased
- Medical or last illness expenses
Why have life insurance?
Having life insurance is not mandatory. The insured only seek that the beneficiaries can lead a life with certain financial tranquillity in the event of their death. That is why it is usual for parents to purchase life insurance and choose their children as beneficiaries.
If one of the insured parents dies, then the children will be entitled to compensation that will be used to cover their studies or to pay living expenses. If the holder does not choose his beneficiaries, the insured sum will be given to his natural heirs.
What does life policy ensure?
Life insurance, as the name implies, values a person’s life. You could say that the well insured. The obligation assumed by the insurer to pay a figure of money is born with the signing of the contract but is perfected with the occurrence of the accident that, in the case of life policies, is the death of the creditor or, according to some contracts, its total or permanent disability.
In order to receive compensation, the policyholder or any of the beneficiaries must inform the insurance company that the holder has died. According to the Argentine Insurance Law No. 17,418, those interested have a period of up to 3 calendar years to make this claim.
How do you report the death of the owner?
The complaint is a brief procedure. Any of those interested should go to the insurance company to record the documents proving the death of the holder. In some cases, it is only necessary to deliver the death certificate, but this will depend on the conditions established in the policy.
Companies have the right to request additional certificates – such as the certified copy of the autopsy – to know the causes of death. All mandatory documentation is delivered to the claims address along with a form issued by the insurer.
If everything is in order, the company will pay the insured amount to the beneficiaries in less than 30 calendar days.
Can an insurer not pay the beneficiary?
Actually yes. If the insurance company suspects that the collection of compensation is irregular, it could challenge the payment of the insured amount. In these cases, the company’s legal department opens a procedure and investigates:
- If the collection of the policy is a fraud
- If the causes of death described in the autopsy or death certificate are true. Under the policy, insurers are not required to pay if the insured committed suicide or if the death occurred at the hands of the beneficiary
- If the policyholder died in the commission of a criminal act or illegal act. There are insurers that are very demanding with this point and even consider the drunk or intoxicated status of the holder at the time of his death
In what other cases can there be a delay in payment?
When the beneficiary is a minor, the insurer proceeds to open a trust in his name to access the money once:
- Comes of age
- Count on a tutor or administrator who is responsible for money management
If the policy permits, the insurance company may refuse to make the payment until the beneficiaries do not reach the age of majority.