How many Life Insurance beneficiaries ever make a successful claim in the US per year?

  • by gavamedia
  • Nov 27,2015
  • 8 answers

Out of all the millions that pay in at some point, what percent of beneficiaries actually make a claim AND are successful?
My hypothesis is that Life Insurance owners pay in to policies for years (sometimes hundreds of thousands of dollars), yet most beneficiaries never get a successful claim, either due to allowing the plan to lapse, not qualifying, or not even applying.


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Insurance Answers (8)

mbrcatz 6 months ago

What you don't seem to understand, is that life insurance - pure life insurance - is not a savings account. Whole life, IS a combination of life insurance and savings account. Many, many people "cash in" the savings account portion of their policies, and cancel it before they die.
Life insurance monies paid in THIS YEAR, go to pay claims for people who die THIS YEAR. That's why you can pay less, THIS YEAR, for the premium, than the death benefit.
What DOES happen, sadly, is that survivors get this "attitude" that they are owed money from the deceased's life insurance - even if it has lapsed, even if the money was paid to someone else (who is REALLY the beneficiary), even if there has never been any life insurance in force.
If you WANT life insurance, go buy it. Go pay in. You want life insurance to pay you when dad kicks off? Go buy a policy on his life, and YOU pay the premiums every year. With very few people buying long term care coverage, and very few children wanting to take mom and dad in and provide full time nursing care as they are unable to provide for themselves, mom and dad are FORCED to cash in their life insurance to be able to get WELFARE, to pay for their nursing homes. Then the greedy kids - who didn't pay for nursing home, who didn't take parents in, who didn't even buy the life insurance! - get all attitudy about why they don't get a lump of cash when their parent dies.

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Bill 6 months ago

All most all named beneficiaries collect if the policies were in force at the time of death. They have to file a claim requesting payment and provide the required proof of death and their Identification before payment will be issued.

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curtisports2 6 months ago

If you allow a policy to lapse, you're not entitled to a claim. Second, you do understand that to file a claim on a life insurance policy, the insured has to die, right? Zero percent of payers collect on life insurance policies where the insured isn't dead. For the rest, the only time a life insurance policy does not pay on a claim is when the beneficiary filing the claim cannot provide proof of the death of the insured, or when there is evidence of a beneficiary's involvement in the death of an insured do to foul play, or when a death of an insured is officially ruled a suicide and the policy carries a suicide exclusion. Many do not, but do have an exclusionary period of two years. Very few suicides plan their deaths over that long a period so as to make the insurance a part of the plan.
The last thing you said makes no sense, in the context of the question: "or not even applying".
If you don't apply for a claim, you're not making a claim, never mind a successful one.
Summing up, the VAST majority of claims on in-force policies are paid out in the US.

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lucy 6 months ago

I have never had a problem when filing on my parents and also my husbands parents policy when they died.
The only problem I encountered, was that with my mother in law, the insurance sent us a "checkbook" to write checks as needed. The form had nowhere on it, that stated send the entire proceeds in full, so had to notify them to do this, which they did.

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Bob 6 months ago

You would be wrong,in your hypothesis, thousands upon thousands of claims are filed every year. Yes there is a small percentage of polices that lapse.

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Prepper World Bob 6 months ago

millions of people and beneficiaries have no control over anything - if the person who is insuring their own life that pays premiums and decides who the beneficiaries are

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DON W 6 months ago

Most people purchase life insurance as a temporary risk management tool, with the expectation (and hope) they will never receive a payoff. That's why "term" policies are so popular. Once the need to manage the risk is past (typically when the kids are grown up), the policy owner gladly stops making payments and the policy ends.
As for "not qualifying", I'm not sure what that means.
As for "not applying", it's up to the policy holder to place in their vital records, often with the will, copies of any life insurance policies they have, so that the executor knows who to tell so that they can file a claim with the insurance policy. Of course, in many cases the beneficiary is the spouse who knows quite well about the policy.
But you are correct that the insurance companies collect lots more than they pay out. That helps them to keep rates relatively low, and allows them to make the profit they are entitled to in a free market economy.

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jmm2112 6 months ago

Your hypothesis is wrong. First, beneficiaries have no "rights" under a policy unless or until the insured party dies. It's the policy OWNER'S responsibility to keep the policy in force (if he/she so chooses) and the owner's sole right to designate beneficiaries. There is no "qualifying" involved. Either the policy is in force or not and either you are a beneficiary or you're not. There's not much grey area there.
If your complaint is that many policy owners allow policies to lapse, some do. That has nothing to do with beneficiaries.

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