What procedures must I do to collect the compensation for Absolute Permanent Disability or death of a relative in Life Insurance?
It is possible that you, who are reading this article, do it because you are the owner and beneficiary of a Life insurance or family member of someone who has it and has passed away, or you are considering the possibility of getting life insurance.
Many times we have Life insurances because the agreement of the sector of the company where we work contemplates it, credit cards that we have with banks, personal loans, mortgage loans or simply because we are foresight and we have foreseen it as a protection measure for ourselves and our family by having incorporated guarantees such as Disability, serious diseases, Etc.
In this first part of the article I am going to inform you how you can collect the indemnity stipulated as guarantee in a Life insurance where you have included the IPA guarantee (Absolute Permanent Disability). In the second part of the article I will inform you how to find out if a relative had a Life insurance and accidents and the steps to take to find out, as well as collect compensation for the death of a Life insurance.
What is considered Absolute Permanent Disability?
If we have contracted the guarantee of absolute permanent disability (IPA). You may be wondering what the IPA is or Absolute permanent disability. It is neither more nor less the physical condition that totally and permanently disables a worker to be able to develop any profession or trade. This situation may be the cause or occurrence of an accident or illness. When this situation arrives and as the owner, I am the beneficiary of an Insurance life you will ask yourself:
How to collect Life Insurance for absolute permanent disability?
If you declare the absolute permanent disability of the owner and / or beneficiary of the policy, the first thing you should do and as soon as possible, notify the insurance company, accompanying this notification of a certificate of incapacity issued by the National Institute of Social Security indicating the date and what causes are those that have caused the invalidity. Sometimes the company may request an additional medical and / or expert evaluation, although not always, and depending on the company. You can also do this essential notification process with us Euroteide Seguros (Insurance Advisors), who will refer you and make sure that it reaches the Insurance company that we represent. If you are not a customer of Euroteide Seguros (Insurance Advisors)We also help you in this and all the procedures.
The insurance company, after examining the documentation, certificates and reports, You must make the payment within 40 days of notification of the disability or claim. There are times when the payment takes even less.
If the INSS issues a reviewable absolute permanent disability resolution, the company may not compensate us, or that we had to wait for the INSS declare absolute permanent disability without having to review that is total. The general conditions of the policies must be read very well. Hence the vital importance that when hiring a Life insurance let's have a good insurance advisor and we hire the appropriate guarantees.
If the insurer does not satisfy the payment within three months without just cause, the payment will be increased with an annual interest of 50%.
Very important and to bear in mind that in case the guarantee of absolute permanent disability is used and the benefit is collected the death guarantee is considered extinguished and therefore void. The policies that cover death and IPA (total and absolute disability) Both cover both guarantees, whichever occurs first. Never both. Consequently, a life policy that is charged for Absolute Permanent Disability will be considered fully satisfied. If you want to cover the death you should think about hiring another Life insurance.
How to find out if a relative, friend, or acquaintance had life or accident insurance?
If we know that our family member had life insurance underwritten by one of the insurance companies that he represents Euroteide Seguros (Insurance Brokers and Consultants) or any other, we will have it very easy because once we have compiled all the documentation that I will list later, in about four weeks we should receive the compensation agreed in the capital of the policy and at most in 40 days.
If we do not know that our family member had Life Insurance, what we have to do immediately is go to Ministry of Justice and ask for the "Certificate of insurance contracts "of death coverage is the document that certifies the current contracts in which the deceased person was listed as insured and with which insurance entity. In the event that the deceased person is not listed as insured in any contract, such an end shall be expressly stated in the certificate that is issued.
Insurance contracts for which it is possible to obtain a certificate are those related to Life insurance with death coverage and accident insurance that covers the insured's death contingency, whether it is individual or group policies.
The data is available in the Registry of Death Coverage Insurance Contracts for a period of 5 years from the date of death, from the Ministry of Justice.
Who can request & present it
You can request the certificate any person interested in obtaining information, provided that they present the required documents, or in the case of electronic request, the necessary death data is available electronically.
The legal term for the issuance of these certificates is 7 business days from receipt in the case of a request by post; this period is halved in the case of telematic application. However, online requests through the Ministry's electronic headquarters - https://sede.mjusticia.gob.es - are being issued within a period of 24 to 48 hours.
Important additional information.
When the certificate of death coverage insurance contracts is to take effect abroad, needs to be legalized. do not forget to warn it when you request it where it is issued. Single legalization or Apostille of The Hague.
What is the order of priority and the beneficiary of life insurance?
Under this order, the first beneficiary would be the surviving spouse at the time of death. If missing, the surviving children in equal parts. If there are no children or they are not alive, the beneficiaries would be the parents of the insured. And in default of all of them, the legal heirs of the deceased in equal parts.
Who is the beneficiary of the insurance?
Life insurance contracts always have a beneficiary in case the death of the insured person. The beneficiary is the one who has the right to claim compensation or guaranteed benefit in your policy.
As I previously referred to confirm if that relative had contracted a Life Insurance, you should go to the Life Insurance Registry. In the certificate issued to you in case of having life insurance for this person, you will obtain all the information about Insurance with death coverage of which it was insured, the policy number and the insurer.
If you have contracted your insurance at Euroteide Seguros (Insurance Advisors) we will send the documentation that we will request from the insurer. The documentation that we will request from you will be the following: A) Death certificate, B) medical report of the death, C) official documentation proving that you are the beneficiary of Life Insurance, either by direct appointment or by priority order. If you are not a customer of Euroteide Seguros (Insurance Brokers and Consultants) Once you know who the insurer is, you will have to contact them to find out if you are the designated beneficiary. If no beneficiary has been expressly designated, the order of priority established in the policy will apply. In this, if you wish, we can help you by giving you instructions so that you can obtain compensation very quickly.
What is the order of priority?
This would be the order to apply, the first beneficiary would be the surviving spouse at the time of deathor. If missing, the surviving children equally. If there are no children or they are not alive, the beneficiaries would be the parents of the insured. And in default of all of them, the legal heirs of the deceased in equal parts.
What taxes are paid to collect Life Insurance?
If you are a beneficiary of a Life insurance implies the payment of taxes when collecting the corresponding compensation. Rather, depending on the condition of beneficiary you will even have to pay before you can collect.
When the policyholder and the beneficiary are the same person, the collection of the insured capital is subject to the Personal Income Tax (IRPF). In these cases, the insurer will retain the amount corresponding to the tax, depending on the amount of compensation.
In the other cases or situations, the beneficiary will have to take charge of paying the Inheritance and Gift Tax (ISD). If you are also the heir of the insured, the compensation for the Life insurance You will have to add it to the value of the assets that are part of the inheritance.
If what you want is collect life insurance without waiting for the inheritance processMany times it is advisable to do a partial self-assessment of the tax for the value of the compensation. Do not forget that the deadline to file the declaration or liquidation of the inheritance is six months.
How much must be declared?
Now you know who can be the beneficiary of collecting a Life insurance and that you have to pay taxes.
The amount of taxes to pay varies depending on the way the capital is received. If you charge the benefit only once, that will be the amount to declare. If you receive it in the form of a periodic benefit, you will have to declare the current value of the rent.
Anyway and in any way it will be the insurer who certifies the amount to be received, the data of the policyholder, the effective date of the Insurance and of course, who are the beneficiaries.
What is the percentage to be taxed?
The percentage you will have to pay to collect a Life insurance will depend on the type of tax.
If the benefit is received in the form of capital subject to personal income tax, its amount is included in the tax base of savings, and the applicable rate is:
- 19% up to 6.000 euros.
- 21% between 6.001 and 50.000 euros.
- 23% when it exceeds 50.000 euros.
If we are subject to Inheritance or Gift Tax, the amount to be paid will depend on some variables such as: the family relationship that unites you with the insured, the degree of disability you have and, above all, the Autonomous Community to which you have to file the tax return. It is the Autonomous Communities that manage this tax and it is at the domicile of the deceased where it is settled.
How long do I have to claim compensation or collect the Life Insurance Warranty for death?
Law 50/80 of the Insurance contract establishes that the actions derived from an Insurance contract on persons are prescribed after a term of 5 years. Therefore, you will have the right and will be able to claim, as a beneficiary, the payment of the benefit in the 5 years following the death.
If you are an heir as well as a beneficiary, the deadline to file the ISD settlement (Inheritance and Donations Tax) es six months since the event occurred. In this period of time you are obliged to present the self-assessment together with the documentation that accredits your status as heir.
After this you would only have to bring the documentation to Euroteide Seguros (Insurance Brokers and Consultants) Who would be in charge of sending it to the insurer take the pertinent follow-up and notify you when the insurer is going to make the transfer with the payment of the compensation event that occurs within a maximum period of about 4 weeks.
If you analyze it, it is not difficult to collect a Life insurance. Something we often do not know is that the death insurance benefit cannot be attached.
Euroteide Seguros (Insurance Brokers and Consultants) with more than 23 years advising on all kinds of General, savings and investment and health insurance, we are specialist and connoisseurs of the different types of Life insurances. Remember that in any case We will be happy to advise you to subscribe the most suitable life insurance for you, and in helping you and being by your side or yours, when a contingency contemplated in it occurs.