Your Insurance Checklist After a Death in the Family

After a loved one passes away, you’ll need to take care of any remaining business and to close their accounts. As you begin sorting through all the paperwork and bills, you’ll also need to make sure that certain insurance policies are claimed, some canceled and other ones amended. The following insurance checklist after death will help guide you through the necessary steps to handle all existing insurance policies after a death in the family.

Gather Essential Documents

• Death Certificates: Make multiple certified copies of the certified death certificate, as it will be required for several insurance policies as well as any accounts you intend to close.
• Insurance Policies: Locate any life, health, auto, home, renters and commercial insurance policies for which the deceased was either the primary policyholder or is named in the policy.
• Proof of Relationship: Have the relevant marriage and birth certificates as well as personal identification ready to prove the relationship to the deceased.
• Will and Testament: If there is one, find the legal will or trust left behind by the deceased person. If you’re unsure that one exists, contact their personal attorney.
• Major Credit Reporting Agencies. TransUnion, Experian and Equifax will let you know if the deceased owes money to any financial institutions, like a credit card company.

Life Insurance Policies

Sometimes, life insurance companies will reach out to the beneficiary or beneficiaries of the life insurance policy, but not always. Once you have a death certificate, go ahead and contact insurance companies and be ready with a death certificate for each one.

If you’re the beneficiary, you can now initiate the claim process to receive the death and burial benefits. Having the policy number is very helpful too.

Not only do you need to contact the deceased’s personal life insurance company, but they may also have had life insurance through an employer. It’s important for the beneficiary to contact that employer to receive the death benefit.

Review Life Insurance Policies

• Beneficiary Designations: Confirm the named beneficiaries on all life insurance policies.
• Private Life Insurance and Group Life Insurance: You may need to contact both an employer about a group life insurance policy as well as contacting the deceased’s private life insurance company.
• Payout Options: The beneficiary can choose to receive the life insurance death benefit as a lump sum or as annuities. The payment can cover a funeral or memorial service.

Health Insurance of the Deceased

Contact the health insurance company and check to see if there are any outstanding claims that need to be paid and cancel the private health insurance policy.

If there is a spouse or other dependents on that health insurance policy, they will no longer have coverage but are able to shop for a new policy outside the annual open enrollment period.

If the spouse had an employer-sponsored health insurance policy, the surviving spouse may be able to continue with the same plan for up to 18 months through COBRA. If they are 65 and older, they qualify for Medicare.

If you are the primary policyholder and someone on your policy died, call the health insurance company or employer and remove the deceased person from the policy.

If the deceased was retired and receiving social security benefits, it's important to contact the social security administration to report the death. The surviving spouse may receive benefits from the social security administration.

Auto Insurance Policies Tied to the Deceased

If you share a car insurance policy with someone who died, call and remove them from the policy. If a deceased person left a car, it’s important to first establish who the new owner is before insuring it. Usually, real property is passed onto family members.

If there is a surviving spouse, in most states (except California and Texas) they get the car automatically.⁽¹⁾ If not, there may be a named executor or administrator with power of attorney over the deceased’s will or trust. That person decides who gets the car, as per the deceased individual’s wishes.

If there is no will or trust, all real personal property must go into a probate process for it to be dispersed to heirs according to state laws. In most cases, a will or trust will bypass probate laws. However, the car may also be sold off to pay any remaining outstanding debts, and the remainder will be issued to the heirs.

You can file a formal probate application for the estate of the deceased once you have a death certificate. The laws surrounding title transfer vary per state. For example, in California, the executor signs the title paper with the deceased’s name, followed by their name, and the word “Executor.”⁽¹⁾

Once the title is transferred, it’s important to notify the auto insurance company to cancel the old policy and buy a new one. Do not cancel the old policy until the new one in your name is active. Otherwise, you may not be insured if something happens to the car in the interim.

If you have car insurance on another car, you’ll be eligible for a multi-car discount, so now is a good time to compare rates and switch over to a better carrier who offers you a lower rate.

Homeowners Insurance

The process of sorting out ownership of a home is much like that of a car because you’ll have to transfer the home title after death, if the title belongs to the person who died. Here again, the home title goes into probate if there is no will or trust and no executor. Estate laws vary by state but marital property in most cases transfers automatically to the surviving spouse.⁽³⁾

Also, if there are outstanding debts, the house may be sold off to pay them before the remainder is distributed to the heirs. Even when there is a will, if the outstanding debt is significant, the executor may choose to sell the house before distributing the remainder to the beneficiaries.⁽²⁾

If it’s determined that you inherit the home, you have no obligation to stay with the same insurance company currently insuring the home. It’s a good idea to shop around to find the best policy for the home, and at the lowest price.

Renters Insurance

There may be multiple people on a renters insurance policy. Notify the home insurance provider of the death, in order to remove the deceased person from the policy.

If the policy is solely in the name of the deceased person, you’ll have to cancel that policy and buy a new one. You may or may not be asked to show the death certificate to cancel that policy.

It’s a good idea to compare rates and coverages when buying a new policy. This is the only way to find out who will offer you the best rate.

Commercial Insurance

If the deceased person owned a family business, it’s important to transfer that business’s commercial insurance policy to the new person in charge. It may not even be a family member that is appointed as the new policyholder. However, it’s important to sort it all out and call the insurance company with your resolution. It may even be worthwhile to compare rates and see if you can get a better deal on a new policy.

Debt and Mortgage Coverage

See if the deceased had credit life insurance or mortgage protection insurance to cover outstanding debts and mortgage. You’ll want to do this before real properties go into probate court, which will happen if there is no will or trust.

Check Employer Benefits and Pensions

A surviving spouse should inquire about pension benefits. The surviving spouse may have participated in a retirement plan, and benefits can be paid to the designated beneficiary in a lump sum or as an annuity.⁽⁴⁾