About 65% of our clientele pay for our services with an insurance assignment. An insurance assignment is when the family brings in a life insurance policy to assist in paying for funeral cost. A beneficiary is under no obligation to use an insurance policy as means of payment for funeral cost - but many, many families do.
The process is this: the insurance policy information is brought in, primarily we are going to need the Insurance company name and a policy number. Other information is helpful if known, the death benefit amount, the beneficiary, and if any loans have been made against the policy.
North Carolina GS 58.58.97 indicates that when the person WITH THE RESPONSIBILITY FOR DISPOSITION of the deceased signs our release form, and we submit that and a North Carolina Notification of Death to the insurance company - then that gives the insurance company permission to speak to us on the family's behalf to secure and verify that information and also we request to receive claim forms. The beneficiary would sign an insurance assignment form we have, that is written just for the dollar amount of the funeral cost. Some insurance companies will accept the assignment form and a death certificate for means for them to pay out the claim.
We deal with many companies over the years and have found this - there's not much in between with the quality of service from insurance companies. They either provide excellent service handling requests, sending forms, and paying out the claim or they are terrible to deal with and have policies in place that are consistent with the way insurance claims were handled 40 years ago.
An interesting element to NC GS 58.58.97 says that the person signing the release - can be the person with the right of disposition... We have many families come in who don't know who the beneficiary is. This part was written to assist in that manner. We have had insurance companies argue that the release form needed to be signed by the beneficiary, but then turn around and won't tell you who the beneficiary is. So that part of the law assists us now, so we don't have to be sure of the beneficiary. Again, once the beneficiary is determined, that beneficiary is under no obligation to pay the funeral bill through the insurance proceeds.
Most reputable companies, when asked will either fax claim forms, email claim forms, or already have a downloadable form on their website. Companies with poor service tell us, "We need 5 to 7 days to research who the beneficiary is..." or, "We will MAIL claim forms with 10 to 14 business days...". In 2016, this is a poor way to transpire an insurance claim. Mail service for this claim service worked fine in 1976, but 40 years later they can do better. We can't understand why most insurance companies don't provide excellent policy service at the time of a claim - it appears that would be their best advertising. Several great companies, Horace Mann Teachers Insurance and Settler's Life stand out as companies we have dealt with that went out of their way to process the claim efficiently and quickly. But unfortunately, most companies fall into the poor service bracket.
Handling these claims for families, I can tell you it is easy to spend 20 minutes on hold with an insurance companies' claims service - just to be told one of those statements - that something will get mailed later. Anymore, we don't play baby games with companies who still insist on doing business like they did in 1976, as I tell them, either their IT department is woefully inadequate, or else they are understaffed. In these cases, we simply file a complaint with the North Carolina Commissioner of Insurance.
Families and individuals have paid their premiums in to these companies for years, and simply ask for excellent policy service when they need the services of a life claim department. Companies, in our opinion, should not add to the consumers' grief and worry issues by issuing statements such as "we'll mail something in 10 days..." or "Let us stare at the computer for 5 to 7 days and see when it can produce a beneficiary name..." . I can tell you from experience, families hear statements and policies such as these as stallling techniques to hang on to the funds a little longer.
Most companies pay out the death benefit in 7 days to 5 weeks, though 3 weeks is probably a norm. A good Funeral Director will always make a copy of the check they have received from an insurance company and send that to the responsible family member along with their receipt - it's just good business.
There is one downside to using insurance at the time of death that is not the fault of the family - and that is when a Medical Examiner's case requires further investigation and autopsy and the death certificate gets the cause of death as PENDING. When this is entered, usually, that means it will be a minimum of 12 weeks before a cause of death will be entered. In most situations, an insurance company will not pay out on a PENDING death certificate - it depends on the circumstances. Sometimes, it is not uncommon for that cause of death to be entered 4 or 5 MONTHS after death. In these cases, unfortunately, the funeral home is going to require another form of payment for services. Filing insurance for families an accepting payment 3 weeks after the death is one thing, waiting 3 months or more is another.
The North Carolina Commissioner of Insurance maintains a website on that site is a list of insurance companies and the number and ratio of complaints against a given company over the previous year. Sometimes, depending on the ratio, the number of complaints on a given company can be very telling.
There are a tremendous amount of complaints that originate out of a small funeral parlor in Bostic, NC, simply because when we are working on the family's behalf to get their insurance filed, we don't play baby games, hence, we keep the Commissioner of Insurance' complaint page at handy access all the time, should you ever need it... here's the link: