How can you cash out your policy?


Life insurance covers you in the event of death or disability, guaranteeing you, in the event of absolute and permanent disability, or the persons designated as beneficiaries in the event of death, the collection of the contracted capital. When the fateful moment arrives, one of the most important questions is when the insurance compensation is collected. It is possible that the family needs the capital to cover burial expenses or the settlement of taxes derived from death, for example. Or even to settle part of the mortgage, if you have taken out mortgage life insurance. From IATI, your life insurance specialist, we tell you all the procedures you must do to collect life insurance and the period of time in which the capital is received.

Who is the beneficiary of life insurance?

As we have seen, in the event of a possible eventuality that results in death, it is important to dispose of the capital contracted in the life insurance as soon as possible to cover the expenses that may arise. The first question you should ask yourself is, am I a beneficiary of life insurance?

The policyholder, that is, the person who takes out the policy, designates one or more beneficiaries in the contract, who will receive the capital initially contracted in the policy proportionally unless another formula is specified in the contract. distribution. The beneficiaries do not have to be the heirs of the deceased. If you are not sure whether or not the deceased person had contracted life insurance and if you are the possible beneficiary, you can go to the Ministry of Justice’s Register of Death Coverage Insurance Contracts 15 days after death, where you will be issued a certificate indicating the life insurance that the deceased person had subscribed.

The first step to collect the life insurance

Yes, you know What is the insurance of life,  but you are not entirely clear about what you have to do to collect it if you are entitled to it, one of the main issues you must take into account is that, in order to demand compensation, you will first have to carry out some procedures directly with the insurance company. In principle, you have a period of 7 days to inform the insurer of the event, however, this period can be extended as long as the company can verify that the beneficiary has not acted in bad faith.

In any case, it is important to know that, in the event of non-compliance, the insurer may claim damages alleging failure to declare the facts that gave rise to the death of the life insurance holder.

Thus, within the time stipulated by law (unless the policy specifies otherwise), as a beneficiary you will have to provide all kinds of information about the circumstances that caused the loss.

How long does it take to collect life insurance?

When you have finished with all the procedures required by law and by the insurance company itself, then you will have to wait about 3 months to collect the life insurance. The Insurance Contract Law establishes that the term cannot be longer and that the insurer is obliged to pay compensation at the end of the relevant investigations and appraisals to confirm the existence of a claim and define the amount for the damages that result from it.

The Law that regulates the relationship between the insured and the insurer establishes that the 3 months will begin to count from the receipt of the claim declaration and that after this time the insured can claim both compensation and interest generated by delay. And that’s not all: the insurer could be sanctioned by the General Directorate of Insurance and Pension Funds.

Time to collect the life insurance

The first thing you should do to request the capital of the policy or the other free services that you have included is to contact IATI or directly with the insurance company. The usual maximum period for communicating the event to the company is one week. In any case, check-in the conditions of the policy if a different term is specified. Make sure you have your policy details handy. An adviser from the company, or from IATI if you choose to contact us directly, will ask you to identify yourself, explain the circumstances of the event, and will inform you of how to proceed to make use of the guarantees of the policy.

Once it has been verified that the deceased person had life insurance with IATI, the company will initiate the procedures so that the beneficiaries can collect the capital. The term stipulated by law to collect compensation is 40 days. You must also remember that the prescription period of life insurance is 5 years so that after this period the beneficiary does not have the right to receive the capital.

What amount is charged in life insurance?

The amount that life insurance benefits receive will depend on the contracted capital. Usually, it is recommended that the insured capital should be equivalent to approximately three times the gross annual income. To give you an idea, on average, IATI clients insure 100,000 euros, and the most contracted guarantee is the one that includes Death + Absolute and Permanent Disability. In the event of suffering an accident that results in absolute and permanent disability, the capital to be received may double or even triple depending on the contracted modality.

In this way, in the event of a possible eventuality, the family can make up for the lack of income derived from the event and even pay off part of the mortgage, in the event that they have taken out mortgage life insurance. As you know, there is no obligation to take out life insurance with the bank where you have the mortgage. Hiring your life insurance with a trusted insurer like the one proposed by IATI will save you up to almost 50% of the fee.

Capital advance for funeral expenses and payment of taxes

Those 40 days it takes to collect the life insurance may be too long, taking into account that the family has to deal immediately with the funeral expenses of the deceased person. For these cases, IATI provides an advance of 10% of the death capital with a maximum of 5,000 euros. It is only necessary to present the death certificate and the identification of the beneficiaries.

In the same way, the life insurance contract with IATI advances you a capital to face the liquidations of the taxes linked to death, such as the Inheritance Tax, which must be compulsorily settled before collecting the life insurance.

Do not forget that, in addition to the capital advance, IATI life insurance offers a free professional psychological counseling service to first-degree relatives. In this way, in addition to receiving advice on the procedures to be carried out, you will feel accompanied at all times to deal with the situation.

By Master James

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