There aren’t many things in life that are as difficult as grieving the death of a loved one. While it may be difficult to make decisions right away, you may need to take care of some important insurance matters, including:
Life insurance
Life insurance was created for times just like this. If your loved one has life insurance and you are the beneficiary, you will have peace of mind knowing you have the financial resources to help you stay afloat during this difficult time.
- If your loved one dies, and you are the beneficiary on his or her life insurance policy, contact your life insurance advisor or provider to find out how the benefit will be distributed to you.
- If you are the sole financial provider for your family and don’t already have a life insurance policy, you should consider purchasing one.
- If you already have a life insurance policy, consider whether additional life insurance coverage is needed.
Health insurance
If one partner in a marriage dies and he or she provided insurance for the family through an employer with over 20 employees, living dependents who were on the insured’s policy may qualify for COBRA coverage. COBRA (which stands for the Consolidated Omnibus Budget Reconciliation Act), gives the dependents the right to continue group health benefits provided by their group health plan for a limited time after a loved one’s death.1
- The employer will notify the insurance plan’s administrator within 30 days after the employee’s death. Then the surviving partner will receive a notice of COBRA eligibility and rates by mail. The surviving partner will have 60 days to decide whether he or she wants to continue insurance coverage through COBRA and 45 days after electing coverage to pay the initial premium.2
- COBRA will help the surviving partner retain insurance coverage for 36 months after the death of the loved one. After that, the surviving partner will need to obtain another health insurance policy through an employer or purchase an individual plan.2
- To find out more about COBRA coverage, visit the U.S. Department of Labor online at http://www.dol.gov/dol/topic/health-plans/cobra.htm.
Although not required by law, some association-group plans allow surviving dependents to remain on health or life insurance plans through the association-group after the insured spouse has died. Check with your plan’s administrator to find out if your plans have this feature.
Long-term disability insurance
If a loved one dies and leaves you as the sole provider for your dependents, you may want to purchase an LTD policy so that your family’s income is protected if you experience a disabling injury or illness.
Also, if your loved one was receiving disability benefits at the time of death, you should check with the insurance carrier to see if there is a survivor benefit.
1 United States Department of Labor website, Continuation of Health Coverage–COBRA page at http://www.dol.gov/dol/topic/health-plans/cobra.htm, updated 2010. Accessed on April 6, 2010.
2 United States Department of Labor website, Employee Benefits Security Administration at http://www.dol.gov/ebsa/publications/life_changes.html. Accessed April 6, 2010.
