When checking the deceased’s life insurance coverage, you should be aware of the four types available.
1. Individually purchased life insurance
You may find individual policies among the deceased’s papers. If not, look in his or her checkbook and/or refer to old paycheck stubs for premiums to any insurance companies. Once you know whether individual policies exist, you can call the life insurance companies for instructions.
Benefits will be payable only to the beneficiary or beneficiaries named in the policy.
2. Group life insurance
If the person who has died was employed at the time of death, they may have been covered by a group life insurance policy. Contact the employer’s benefits office to determine if such coverage was provided.
3. Association policies
These are usually group policies yielding modest benefits, provided through membership in “affinity groups” or professional associations. If you know the deceased belonged to any professional association or group, contact a representative to ask whether life insurance is offered to its members.
4. Credit life insurance
This type of life insurance is usually used to pay off outstanding debts if the policyholder dies. There are two types of credit life insurance: mortgage insurance and credit card insurance. Insurance proceeds can be paid to the beneficiaries in several ways. No one payment method is best for everyone. If you are entitled to benefits, be sure to discuss your options with an insurance agent or representative, financial advisor or lawyer.