How can you access cash?: requirements, terms, and more


We explain all the requirements and procedures that you must follow to collect the life insurance

When a family member dies we must take care of multiple procedures. One of them has to do with insurance. But, how to collect life insurance from a person close to us? Do I have to meet certain requirements to do it? Does it affect income tax in any way? Learn all the details in this guide. And if you are looking for life insurance for yourself, you can also enter our life insurance comparator directly by clicking on the button that appears to your right.

Requirements to collect life insurance for death

The first thing you should know when collecting life insurance for death is, precisely, if the person who has just died had a policy of this type. A policy in which we must appear as beneficiaries. This is the basic requirement to receive this compensation. To verify it, you can go to the Registry of Death Coverage Insurance Contracts, a public registry dependent on the Ministry of Justice. Insurers are registered in the registry and periodically update the information on the signed contracts. However, the request to consult the data cannot be submitted until fifteen days after the death. The aforementioned body will issue a certificate in a maximum of seven days.

At that time you must go to the corresponding insurer to request the payment. The initial management is to obtain a death certificate in the Civil Registry. You will need it after notifying the insurer, in writing, of the insured person’s death within a maximum period of seven days from its occurrence – we will see the exceptions later. It is a prior notification to comply with the deadlines and forms and, thus, gain time to prepare the documentation.

What documents do you need to collect the life insurance?

Each insurer can establish its own protocol here, but we can talk about a series of usual documents that they usually request, to proceed with the insurance payment. Among them, they will ask you:

  • The subscribed life policy.
  • Birth certificate of the insured or ID.
  • Certificate of the Registry of Acts of Last Will and copy of the last will or notarial declaration of heirs.
  • Marriage certificate, in case you are a spouse.
  • Identification of the beneficiaries (for example, family book in case you are a child).
  • Settlement and letter of payment of Inheritance and Donations Tax.
  • In the event of an accident: legal proceedings, report, and autopsy.

You must bear in mind that the insurer may request all kinds of information and complementary documents that allow it to assess whether the compensation payment is appropriate (insured capital). 

 the payment of the entire insured amount or, at least, the so-called minimum amount :

There are three ways to collect, depending on the life insurance formula we are facing: in a single payment (the amount received by the beneficiaries of the insured himself, if it is survival insurance), as an annuity for life (the life expectancy of the beneficiary is estimated and the capital is divided into monthly installments) or as a temporary income (for a few years). It is the policyholder himself who, in many cases, decides this issue when contracting the policy. 

How to collect life insurance for total permanent disability

But let’s consider another option beyond death: if our life policy includes disability or absolute permanent disability (IPA) coverage and, unfortunately, an incident occurs and we have to avail ourselves of compensation, the procedures are a little more complex.

One of the essential requirements for compensation is to provide the disability resolution document from an official body (such as the National Social Security Institute). The possible obstacle is when said resolution indicates that the invalidity is reviewable.

The verification and determination of the incapacity will be carried out by the insurer -after the presentation of the medical certificate-. If there is no agreement between the company and the insured as to whether the disability is absolute and permanent, it will be submitted to the decision of medical experts.

Documentation to collect the disability life insurance

To obtain life insurance compensation in the event of permanent and absolute disability, the beneficiaries must present the following documents :

  • Birth certificate.
  • DNI, passport, residence card, or NIF.
  • Certificate of disability issued by the National Institute of Social Security, detailing the causes that have caused it.

The terms that apply are the same as in the event of death: once the above documents have been received, the insurer must pay within forty days from receipt of the claim statement (of the disability situation statement) or of the expiration date of the contract. In the same way, if three months go by without receiving the payment, it is considered late and the insurer must also pay interest.

Taxes for the collection of life insurance due to death: personal income tax, inheritance…

Usually, insurers do not allow you to collect any insurance for death if it is not previously demonstrated that you are up to date with the corresponding payment of the Inheritance and Gift Tax. To mitigate this rule (that is if we cannot pay the inheritance tax) and be able to access this compensation without waiting for the inheritance to be processed, the Autonomous Communities (those that manage it) allow a partial self-assessment of the tax for the value of the policy.

In the event that what is charged is an amount for the assumption of permanent and absolute disability, the most convenient thing is to reserve –from the compensation received– the money corresponding to the Personal Income Tax (IRPF); that is, to assume the taxation of the insurance in the following fiscal year. If we speak in fiscal terms, life insurance is treated differently if the amount goes to the policyholder himself, that is if the person who receives the money and the policyholder are the same. It is taxed as movable capital.

However, there is an exception: let’s say, for example, that the beneficiary is the spouse of a couple married in the community. Half would go to personal income tax and the other would correspond to inheritance tax. This last tax varies depending on the autonomous community in which we are. Tax bases may also change based on the beneficiary’s age and other circumstances. In any case, you can go to your insurance mediator, such as to resolve these procedures and doubts.

Deadlines to collect life insurance for death

The deadline for reporting a claim is seven days after knowledge of it unless otherwise specified in the policy. In case of non-compliance, the insurer may claim the damages caused by the lack of declaration. To collect life insurance for death, the insured must provide the company with all kinds of information about the circumstances and consequences of the loss. In case of violation of this duty, the loss of the right to compensation will only occur in the event that there was intent or gross negligence. 

Article 20 of the Insurance Contract Law specifies that the company has a maximum of three months to satisfy the payment. After this time, it is considered a delay, and the insured is entitled to the collection of an annual interest equal to the legal interest of the money in force at the time it is accrued, increased by 50%. In addition, the insurer will be sanctioned by the General Directorate of Insurance and Pension Funds

What to do if we have exceeded the term to collect the life insurance

We have talked about deadlines for the proceedings when it comes to being able to collect life insurance and, it is possible that, due to ignorance or for reasons beyond the will of the family, the deadline expires without having notified the death. Consequently, the company may be reluctant to provide the corresponding capital.

However, for example, if the failure to notify you within seven days is due to a reason that is neither negligent nor willful, you have a remedy

Because article 23 of the Insurance Contract Law establishes a term of five years until its prescription to claim personal injury insurance, such as life, accident, or illness, as long as “when there is no fraud or bad faith” in the fact of not having claimed within the corresponding term. For example, in the case of not knowing that the insured had subscribed to life insurance and having found it after his death.

The prescription can be interrupted by extrajudicial claims, certified letters, emails, etc.). In the event that the insurer is reluctant to pay for the life insurance, we recommend that you go to the company’s customer service department and formalize your claim in writing. If you do not get a satisfactory answer, you can appeal to the claims service of the General Directorate of Insurance and Pension Funds (DGS). As a last resort, you always have the judicial route.

Reasons to take out life insurance

Having seen what we have seen and especially after the pandemic situation, we see that having life insurance that protects our loved ones in the event of death is essential. If you have a relative who has just passed away and you are looking for how to collect life insurance, you have probably noticed. And maybe it’s time to take out a policy for yourself. In addition, there are many types of life insurance, each of which protects you in a different way in different situations.

In other words, the purpose of contracting life insurance would be to protect our family after death (covering the death of the insured is the most basic coverage). The beneficiaries can receive capital or an income. The purpose is to cushion the economic impact of death. Another reason to take out life insurance is to protect the mortgage: more than 50% of those who have a home are paying a mortgage. Many banks offer better conditions if we take out life insurance with them. The objective is that, if the policyholders die, it is the insurance that pays the installments that remain to be paid. 

Ensuring that children can study is another of the common objectives of those who take out life insurance. Many insurers allow you to include a specific clause that guarantees the continuity of the studies of the beneficiaries in case of death.

Likewise, and although the simplest guarantee is the one that covers the death of the insured person, other benefits of life insurance must be taken into account. Like the additional coverages that respond in case of disability or serious illness, also fundamental. A good example of this is policies such as Axa Vida Protect: they cover various cases of disability and also allow an optional capital guarantee to be added in the event of serious illness. These are two situations that have a direct impact on the family economy. In short, life insurance is a lifesaver.

How to find the best life insurance at the best price

Unfortunately, up to 78% of Spaniards consider life insurance to be a very complex products. Hence, on many occasions, they decide to do without them. However, everything is simplified using the life insurance comparator. Because getting personalized prices in more than 10 different insurers only takes 1 minute. It is the time it takes to fill out our form; a very simple and intuitive procedure.

With all these offers you can choose wisely. And compare both the prices and the coverage included in each policy, two fundamental data to identify the life insurance with the best quality/price ratio. Thanks to our comparator, you can save a lot of money on the insurance premium. But also time: the time you won’t have to spend learning about all the life insurance options on the market.

By aamritri

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