Processing straightforward insurance assignments results in peace of mind for families and your funeral home.
Families feel relief that their loved one’s funerals will be funded. You feel reassured knowing you’ll be paid by the insurance company.
Policies with red flags are a different story. These policies can put your funeral home at risk of taking on policies an insurance company won’t fund. Not to mention, it creates additional stress for grieving families.
But if you’re not an insurance expert, how can you spot the red flags and know what to look for?
To protect your funeral home, here are 6 questions to ask yourself before accepting an insurance policy and what they mean.
1. Is the policy assignable?
The beneficiary is an important part of every insurance policy. And if the policy is unassignable, your funeral home will have difficulty receiving payment for your services.
Plus, the family will have to go through the insurance company to receive funding for an unassignable policy, creating a further delay.
Before taking on an insurance assignment, make sure that the policy is assignable so your funeral home’s finances are protected and the family can focus on the funeral.
2. Is the policy contestable?
If the policy is less than 2 years old or reinstated less than 2 years before the death occurred, it will likely be considered contestable by the insurance company. That means the insurance company will want a medical review of the loved one, additional documents, and medical records to determine if it will fund the policy.
A contestable policy typically results in a lengthy process, which means waiting months for payment or even a rejection from the insurance company. Double-check the life of the policy to be safe.
3. Is the policy lapsed or paid to date?
A paid-to-date policy is a simple-to-process policy. However, a lapsed policy comes with a few risks.
Depending on the insurance company, a lapsed policy either has no value or decreased value. Most insurance companies won’t fund a no-value policy. The insurance company can take out the premiums of a lapsed policy to make it active again, but the policy will lose value and may not cover the cost of the funeral.
Avoid this by making sure the policy is current and paid to date.
4. Is there a minor or an estate involved?
An insurance policy that lists a minor or the estate as the beneficiary can cause a delay and leave your funeral home waiting for funding.
Most insurance companies will not accept an assignment if the beneficiary is a minor. If the loved one’s estate is the beneficiary, many insurance companies will require a small estate affidavit, estate paperwork, or signed policy and death claim forms by the estate’s executor. The loved one’s next of kin may have to obtain those documents from their local courthouse, causing added stress and time.
Before taking on a policy, check the beneficiary information and plan from there.
5. Does the policy exclude suicide?
When evaluating an insurance assignment for a presumed suicide, it’s crucial to approach the situation sensitively.
Some policies offer coverage for suicide, ensuring smooth funding. However, the funding process may be impacted if the policy excludes suicide. In cases where suicide is assumed, the insurance company may request an autopsy or toxicology report.
Before accepting an assignment involving a suicidal death, contact the insurance company to verify the policy’s clause on suicide. That way, you’ll have all the correct information to make the right decision for your business.
6. Are there any loans or liens against the policy?
A policy with a loan or lien against it will still be funded – but not for the total amount.
A person who borrows against their insurance policy lowers the overall value of the policy. That means that upon their death, their family might believe the policy is worth a certain amount, but it could be far less and may not cover the cost of the funeral.
Ask the family if the policy has any loans or liens against it so you can know straight away that the policy will be funded for less than the expected amount.
Your business is worth asking these important questions.
Taking a few extra minutes to investigate risky policies can save your funeral home from headaches and protect families from extra suffering. Because at the end of the day, your priority is making sure the family is cared for.
So, let us catch the red flags for you.
Work with CLAIMCHECK and have a team of insurance experts available whenever you need. You’ll also enjoy benefits like:
- 100% Risk-Free Verification – Submit claims with confidence as we analyze and verify each policy. You’ll never have to worry about taking on a bad policy again.
- Quick and Easy Funding – Rest easy knowing your payment is on the way. More than half of all assignments we receive are funded within 24 hours and 86% are funded within 3 business days.
- And more!
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