How to Claim Life Insurance After a Death in NC
After someone dies, life insurance is often the first source of financial relief for a grieving family. It can cover funeral costs, mortgage payments, and living expenses during the months it takes to settle an estate. But claiming life insurance is rarely as simple as making a phone call. You need to find the policies first, determine who the beneficiary is, file the right paperwork, and understand whether the proceeds pass through probate or go directly to the beneficiary. When multiple policies are involved – employer plans, individual policies, accidental death riders – the process multiplies in complexity.
This guide covers everything you need to know about finding, filing, and collecting life insurance after a death in North Carolina.
Afterpath helps North Carolina families locate and claim life insurance proceeds after a loss. Our Pathfinder AI guide walks you through the claims process step by step, our Document Vault securely stores policy documents and death certificates, and our Task Management system tracks every claim filing deadline so nothing falls through the cracks.
Finding All Life Insurance Policies
The first challenge is often just figuring out what policies exist. Many people do not keep their life insurance documents in an obvious place, and some do not tell their families about every policy they own.
Where to Search
Physical documents:
- File cabinets, safes, and desk drawers in the home
- Safe deposit boxes at banks (you may need Letters Testamentary to access these)
- The decedent’s filing system or important papers folder
Financial records:
- Bank statements showing premium payments or automatic withdrawals
- Tax returns – Form 1099-INT from insurance companies, or interest income from policy cash values
- Credit card statements showing recurring charges to insurance companies
- Checkbook registers or bill payment records
Digital records:
- Email accounts (search for “life insurance,” “policy,” “premium,” or names of major insurers)
- Password managers or saved accounts
- Financial planning apps or digital file storage
Employer and professional sources:
- The decedent’s employer HR or benefits department – most employers provide group life insurance (often 1-2x annual salary)
- Former employers who may have provided coverage that was converted to an individual policy
- Professional associations, unions, or alumni organizations that offer group life insurance
- Military service records (SGLI or VGLI for veterans)
State and national resources:
- NC Department of Insurance (NCDOI) Life Insurance Policy Locator – North Carolina participates in the NAIC Life Insurance Policy Locator Service, which searches the databases of participating insurance companies for policies in the decedent’s name
- NAIC Life Insurance Policy Locator at eapps.naic.org/life-policy-locator – a free service available to executors and next of kin
- MIB Group (formerly Medical Information Bureau) – maintains a database of life insurance applications; you can request a records search
How Many Policies Might Exist?
It is not uncommon for someone to have multiple life insurance policies acquired at different stages of life:
- An individual term life policy purchased when they had young children
- A whole life or universal life policy purchased for wealth transfer or estate planning
- A group life policy through their employer
- An accidental death and dismemberment (AD&D) policy through their employer or credit card
- A mortgage protection policy tied to their home loan
- A burial or final expense policy
- A policy through a professional association or fraternal organization
Search thoroughly. Every unclaimed policy is money that belongs to the beneficiaries or the estate.
Afterpath’s Pathfinder can help you build a comprehensive list of where to search for policies based on the decedent’s employment history, professional affiliations, and financial records.
Understanding Beneficiary Designations
Life insurance proceeds do not automatically go to the estate. They go to the named beneficiary on the policy. This is one of the most important distinctions in estate administration.
How Beneficiary Designations Work
When the policy owner purchased the insurance, they named one or more beneficiaries – the people who would receive the death benefit. The beneficiary designation on the policy overrides the will. Even if the will says “I leave everything to my daughter,” if the life insurance policy names someone else as beneficiary, the policy proceeds go to the person named on the policy.
Types of Beneficiaries
- Primary beneficiary: The first person(s) entitled to the death benefit
- Contingent (secondary) beneficiary: Receives the benefit if the primary beneficiary has predeceased the insured or cannot be located
- Revocable beneficiary: Can be changed by the policy owner at any time (most designations are revocable)
- Irrevocable beneficiary: Cannot be changed without the beneficiary’s written consent (common in divorce settlements)
Common Beneficiary Situations
Named individual(s): The most straightforward case. The named person files a claim and receives the proceeds directly.
Multiple beneficiaries: The policy may split the death benefit among several people (e.g., 50% to spouse, 25% to each of two children). Each beneficiary files their own claim.
The estate as beneficiary: If the policy names “the estate of [insured]” as beneficiary, the proceeds become part of the probate estate. This is generally unfavorable because it subjects the proceeds to creditor claims and probate administration costs.
A trust as beneficiary: If the policy names a trust, the trustee files the claim and the proceeds are distributed according to the trust terms.
Minor children as beneficiaries: If a minor is named as beneficiary, the insurance company will not pay the child directly. A guardian or custodian must be appointed to receive the funds, often through a UTMA (Uniform Transfers to Minors Act) account or a court-supervised guardianship.
Predeceased beneficiary: If the primary beneficiary died before the insured and no contingent beneficiary is named, the proceeds typically go to the insured’s estate. NC law does not have a specific “anti-lapse” statute for life insurance beneficiary designations the way it does for will bequests.
Ex-spouse as beneficiary: In North Carolina, divorce does not automatically revoke a life insurance beneficiary designation. If the decedent named their ex-spouse as beneficiary and never updated the designation after the divorce, the ex-spouse is legally entitled to the proceeds. This is a common and painful surprise for families.
Life Insurance and Probate
When Life Insurance Avoids Probate
Life insurance with a named beneficiary (other than the estate) is a non-probate asset. The proceeds pass directly to the beneficiary outside of the probate process. The executor has no authority over these funds, creditors of the estate generally cannot reach them, and they do not appear on the estate inventory.
This is one of the reasons financial advisors recommend keeping beneficiary designations current – it allows the proceeds to reach family members quickly without waiting for probate.
When Life Insurance Goes Through Probate
Life insurance proceeds become part of the probate estate when:
- The estate is named as the beneficiary
- The designated beneficiary predeceased the insured with no contingent beneficiary named
- The policy owner failed to name any beneficiary
- All named beneficiaries disclaim the proceeds
When proceeds flow through probate, they are subject to the estate’s debts, creditor claims, and administration costs before distribution to heirs.
For a deeper explanation of how different assets interact with probate, see our guide on probate vs. non-probate assets.
Filing a Life Insurance Claim
Step 1: Gather Required Documents
Before contacting the insurance company, assemble:
- Certified death certificates – most insurers require an original certified copy (not a photocopy). Order at least one extra for each claim you need to file. See our guide on how many death certificates you need.
- The policy number and policy documents (if available)
- The beneficiary’s identification – government-issued photo ID, Social Security number
- The claimant’s relationship to the insured (documentation may be required)
Step 2: Contact the Insurance Company
Call the insurance company’s claims department. Most major insurers have a dedicated number for death claims. Provide the policy number (if you have it), the insured’s full name, date of birth, Social Security number, and date of death.
The insurer will:
- Verify the policy is in force (premiums were current at the time of death)
- Confirm the beneficiary designation
- Send a claim form (also called a “claimant’s statement”) to the beneficiary
If you do not have the policy number, the insurer can search by the insured’s name, date of birth, and Social Security number.
Step 3: Complete and Submit the Claim Form
The claim form typically asks for:
- The insured’s personal information
- The cause and date of death
- The beneficiary’s personal and banking information
- Payment preference (lump sum, installments, or retained asset account)
- Tax withholding election
Submit the completed form along with a certified death certificate. Some insurers accept claims online or by fax; others require physical mail.
Step 4: Choose a Payment Option
Most insurers offer several payment options:
- Lump sum: The full death benefit paid at once by check or electronic transfer. This is the most common choice.
- Installments: The death benefit paid out over a period of time (monthly, quarterly, annually).
- Retained asset account: The insurer holds the proceeds in an interest-bearing account and provides the beneficiary with a checkbook to draw against it. Be cautious with this option – the interest rates are often low, and the account may not have FDIC protection.
- Annuity: The proceeds are converted into a stream of payments for a fixed period or for the beneficiary’s lifetime.
For most beneficiaries, a lump sum payment deposited into a personal bank account is the simplest and most flexible option.
Step 5: Follow Up
Insurance companies are required to process claims promptly, but delays happen. If you have not received a response within 30 days of filing, call to check the status. Keep records of every communication – dates, names, reference numbers.
Timeline: How Long Does It Take?
A straightforward life insurance claim – with a clear beneficiary designation, an in-force policy, and a natural cause of death – is typically paid within 30 to 60 days of filing.
Delays can occur when:
- The death occurred within the policy’s contestability period (usually the first two years). The insurer may investigate whether the application contained misrepresentations.
- The cause of death is under investigation or pending a coroner’s report
- The beneficiary designation is disputed
- Multiple claimants come forward
- Required documents are missing or incomplete
Employer-Provided Life Insurance
Group Life Insurance
Most employers offer group life insurance as a benefit, often at no cost to the employee. The typical benefit is one to two times the employee’s annual salary. Some employers offer supplemental coverage that the employee can purchase at group rates.
To file a claim on an employer group policy:
- Contact the deceased’s employer HR department
- They will provide the claim forms and identify the group policy insurer
- The beneficiary files the claim directly with the insurer
Accidental Death and Dismemberment (AD&D)
Many employers also provide AD&D coverage, which pays an additional benefit if the death was caused by an accident. AD&D may be bundled with the group life policy or be a separate benefit. Check both.
COBRA and Portability
If the decedent left their employer before death, check whether they converted their group coverage to an individual policy or exercised portability options. These converted policies may still be in force.
Tax Treatment of Life Insurance Proceeds
Income Tax
Life insurance death benefits are generally not subject to federal or North Carolina income tax when paid to a named beneficiary. This is one of the primary advantages of life insurance.
Exceptions:
- Interest earned on proceeds held by the insurer (e.g., in a retained asset account or installment payments) is taxable income
- Transfer-for-value: If the policy was sold or transferred for valuable consideration, a portion of the death benefit may be taxable (this is rare for personal policies)
- Employer-paid group coverage above $50,000: The premium paid by the employer for coverage over $50,000 is imputed income to the employee, but the death benefit itself is still tax-free to the beneficiary
Estate Tax
Life insurance proceeds are included in the gross estate for federal estate tax purposes if:
- The decedent owned the policy (was the policy owner) at the time of death
- The decedent had “incidents of ownership” in the policy (the right to change beneficiaries, borrow against the policy, etc.)
- The proceeds are payable to the decedent’s estate
However, the federal estate tax exemption is $13.61 million (2024), so the vast majority of estates in North Carolina will owe no federal estate tax. North Carolina does not impose a separate state estate tax.
When the Estate Is the Beneficiary
If the proceeds are payable to the estate, they become part of the probate estate and are subject to estate income tax if they generate income (interest) during estate administration. The proceeds themselves are still not subject to income tax, but any income earned on the proceeds while held by the estate is taxable.
Contested and Complicated Claims
Beneficiary Disputes
If multiple people claim to be the rightful beneficiary – for example, an ex-spouse and a current spouse – the insurance company will typically interplead the funds. This means the insurer deposits the death benefit with the court and lets the claimants litigate the dispute. The insurer is released from liability, and the court determines who receives the money.
Contestability Period Claims
If the insured died within the first two years of the policy (the contestability period), the insurer has the right to investigate whether the application contained material misrepresentations – such as undisclosed medical conditions, smoking status, or hazardous activities. If the insurer finds a material misrepresentation, it may:
- Deny the claim entirely
- Reduce the benefit to what the premiums would have purchased at the correct risk level
- Rescind the policy and refund the premiums paid
Suicide Clause
Most life insurance policies contain a suicide exclusion for the first one to two years of the policy. If the insured died by suicide within this period, the insurer will typically deny the death benefit and refund the premiums paid.
Denied Claims
If a claim is denied, the beneficiary has the right to appeal. Request the denial in writing with a specific explanation. Common grounds for appeal include:
- The insurer incorrectly determined the policy had lapsed
- The contestability investigation found an immaterial misrepresentation
- The cause of death was misclassified
If the insurer does not resolve the dispute, you can file a complaint with the North Carolina Department of Insurance (NCDOI) at ncdoi.gov. The NCDOI regulates insurance companies operating in North Carolina and investigates consumer complaints. You can also consult an attorney who specializes in insurance disputes.
Unclaimed Life Insurance in North Carolina
An estimated $7.4 billion in life insurance benefits goes unclaimed nationally each year. If you suspect a policy exists but cannot find it, use these resources:
- NC Department of Insurance Policy Locator: Contact the NCDOI to request a policy search
- NAIC Life Insurance Policy Locator: Free national search tool for executors and next of kin
- NC Unclaimed Property Division: The NC State Treasurer’s office holds unclaimed insurance proceeds. Search at NCcash.com
- MIB Policy Locator: For a small fee, MIB will search their database of insurance applications
Afterpath’s Document Vault provides a secure place to store all policy documents, claim confirmations, and correspondence as you work through the claims process.
Frequently Asked Questions
How many death certificates do I need for life insurance claims?
Each insurance company requires its own certified death certificate (originals, not photocopies). If the decedent had three life insurance policies with three different companies, you need at least three certified copies. Order extras – you will need them for other purposes during estate administration. See our complete guide on how many death certificates you need.
Does life insurance go through probate?
Only if the estate is named as beneficiary, if no beneficiary is named, or if all named beneficiaries predeceased the insured with no contingent beneficiary. In all other cases, life insurance proceeds pass directly to the named beneficiary outside of probate. See our guide on life insurance and probate for more details.
Can creditors of the estate take life insurance proceeds?
Generally, no – if the proceeds are payable to a named beneficiary (not the estate), they are protected from the estate’s creditors under NC law. However, if the estate is the beneficiary, the proceeds become estate assets and are subject to creditor claims.
Can Afterpath help me find and claim life insurance policies?
Yes. Afterpath’s Pathfinder AI guide helps you identify where to search for policies based on the decedent’s employment, financial, and personal history. Our Task Management system tracks each claim from initial filing through payment, with deadline reminders and follow-up prompts. And our Document Vault securely stores all policy documents, claim forms, and correspondence in one place.
What if the life insurance company is no longer in business?
Insurance companies in North Carolina are regulated by the NCDOI. If a company becomes insolvent, the NC Life and Health Insurance Guaranty Association steps in to cover claims up to statutory limits (generally $300,000 for life insurance death benefits). Contact the NCDOI for assistance locating the successor company or guaranty association.
Related Resources
- Life Insurance and Probate in NC – How life insurance interacts with the probate process
- Probate vs. Non-Probate Assets – Understanding which assets go through probate
- The First 48 Hours After a Death: Checklist – Immediate steps after a loss
- How Many Death Certificates Do You Need? – Ordering the right number
- Handling Retirement Accounts After Death in NC – Another major non-probate asset
- Managing Estate Bills During Probate – Keeping the estate’s financial obligations current
Moving Forward
Life insurance exists for exactly this moment – to provide financial stability when a family needs it most. The claims process can feel bureaucratic and impersonal, but the money is there, and you are entitled to it. Search thoroughly for every policy, file claims promptly, and follow up persistently. Every dollar recovered is a dollar that supports the people the decedent wanted to protect.
If you are managing an estate alongside the life insurance claims process, the administrative burden can feel relentless. Afterpath was designed to carry that burden with you – tracking every claim, every deadline, and every document so you can focus on what matters most.
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