A Death in the Family: Handling the Policies

Insurance after a death divides into three categories: policies to claim on, policies to cancel, and policies that must be kept in force. Getting the third category wrong is the expensive mistake.

Before anything else: do not cancel

The instinct is to close accounts and stop payments. Resist it for property and auto coverage.

Policies to claim on

Life insurance

The beneficiary claims directly. Typically required: a certified death certificate, a claim form, and identification. Beneficiaries claim in their own right — the proceeds generally do not pass through the estate unless the estate is the beneficiary.

Look for policies in more than one place: individual policies, employer group life, coverage through a union or association, mortgage life or credit life attached to a loan, and accidental death benefits on a credit card. Several states operate a life policy locator service to help find policies nobody knew about.

Accidental death benefits

Where the death was accidental, additional benefits may exist under an auto policy, an employer plan, or a travel policy. These are frequently missed because nobody thinks to look.

Final expense and burial policies

Often small and often forgotten. Check paperwork and bank statements for premium payments to insurers nobody recognises.

Policies to keep in force

• Homeowners, until the property transfers. Notify the insurer of the death and of whether anyone is living there — a vacant house triggers coverage restrictions within weeks.
• Auto, while vehicles remain titled to the deceased. A vehicle sitting uninsured can also create a registration problem in some states.
• Any policy where the estate has an interest, until that interest is resolved.

Policies to cancel

Health, disability, long-term care, and any personal coverage that ends with the person. Request refunds of unearned premium, which are usually due and not always volunteered.

Auto coverage on a vehicle can be cancelled once it is sold or transferred, not before.

Health coverage for survivors

If the deceased carried the family's health coverage, the surviving family generally loses it. That is a qualifying life event opening a special enrolment period, and the window is short.

Options are the surviving spouse's employer plan, a Marketplace plan, or continuation coverage under COBRA where available. Continuation is usually the most expensive.

This item is urgent in a way the others are not, and it is the one most often left until after the funeral.

Documents you will need repeatedly

Order more certified copies of the death certificate than seem necessary. Insurers, banks, and registries each want one, and most will not accept a photocopy.

Also useful: letters testamentary or the equivalent appointment document, policy numbers, and identification for whoever is acting.

A sequence

1. Obtain certified death certificates — several.
2. Notify property and auto insurers, and confirm what coverage continues and for how long.
3. Address occupancy if a property is now empty.
4. Handle survivors' health coverage inside the enrolment window.
5. Locate and claim life policies. Search bank statements for premium payments.
6. Cancel personal policies and request refunds.
7. Rewrite property and auto policies once ownership is settled.

Be careful about who contacts you

Death records are public in many places, and unsolicited approaches after a death are common. Nobody legitimate needs payment up front to help you locate or claim a policy. Your state Department of Insurance can help at no cost, and several states run free policy locator services.

What we are not saying

We are not giving legal or estate advice. Who is entitled to what, and who may act, are questions for the attorney handling the estate.

What we are saying is that property and auto coverage should be kept in force rather than cancelled, that health coverage for survivors runs on a short window, and that policies nobody knew about are common enough that searching for them is worth the hour.