by Shannon Daugherty, ACS, FLMI, Member Programs Assistant
If you need to make a claim because of a death in your family, please call our Member Service Department at 877-935-2467. They will walk you through the process and send you the paperwork to fill out. Each beneficiary is responsible for completing a “Claim for Life Insurance Death Benefits/Proof of Death” form and they need one death certificate for the deceased, regardless of the number of beneficiaries. They will let you know if there are additional forms needed, such as Letters of Appointment of Executor, Trust paperwork, or death certificates for deceased beneficiaries.
If this is a life insurance policy, you do not need to report the funds you receive for tax purposes. Life insurance is tax-free to beneficiaries. There are certain exceptions to this. If applicable, interest earned on the death proceeds (this depends on the state and/or product) and/or interest earned on the dividends (this depends on the amount of interest earned per year) will be taxable. There may be tax consequences with proceeds from annuities, depending on the type of annuity and how much it is worth. When you talk to our Member Service Department, they will be able to look at your specific situation and give you the answer. If anything needs to be filed with your taxes, Western will send you a 1099 tax form.
The average family spends approximately $10,000 for a traditional funeral.
Many funeral homes do require payment up front; however, some funeral homes will allow the beneficiary to do an “assignment of proceeds.” This means that in addition to the required Western Fraternal Life paperwork, you will also sign an assignment form with the funeral home and submit that to Western. When the claim is paid, Western will pay the funeral home the amount of the assignment, up to but not over the amount of insurance. Any funds remaining are paid to the beneficiary. Death claims are processed in an average of ten business days.
Please be prepared that if the funeral home requires payment up front, you will need to find the means to pay them before you have received the funds from the claim.
There are things you can do to prepare. First, speak with your Western Fraternal Life agent for advice, or someone from Western Fraternal Life Wealth Management, Inc. Second, it’s important to get Power of Attorney paperwork filled out if you haven’t already, and submit that paperwork to Western or any other company before you actually need anything. That way, when you do need something, you can call and get it quickly and without difficulty.
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