This is the eighth of a series on the duties of an executor. Think of it like a checklist, with everything an executor needs to take care of. To make this list as comprehensive as possible, we’ve divided the series into 12 parts.

 To view the series in its entirety, follow this guide:

Life insurance and government benefits can be two sources of comfort for those we leave behind. An extra sense of financial security can go a long way.

In this section, it is not incumbent upon the executor to apply for benefits - unless the executor is a beneficiary. Executors can be a resource in helping loved ones through the process and pointing them in the right direction of insurance companies and necessary paperwork. Of course, most often executors are a close, trusted member of the family and are likely to receive benefits themselves.

Collecting life insurance benefits

Life insurance exists to provide some sort of financial stability for family members, typically spouses and children, when someone dies.

Unfortunately, applying for benefits can be a taxing process during an already emotionally difficult time.

In order to receive benefits, you need to be the beneficiary. If no beneficiary is named, the funds go to the estate of the deceased.

There may be multiple beneficiaries on a policy, with a percentage breakdown of how the money is distributed among them. If the primary beneficiary is no longer living, their portion may go to other beneficiaries depending on how the policy was constructed.

It’s important to remember children under the age of 18 are not eligible to receive funds directly. Instead, they will go to a parent or guardian to choose how to handle those funds on their behalf.

There are also various types of payout options and it is up to the beneficiary to decide how they want to receive funds. Those are:

  • Lifetime income: Payments distributed over the remainder of your life, which are based on your age.
  • Fixed amount: If you want to receive a specific amount each year or month. Payments stop when funds run out.
  • Interest income: Draw interest-only earnings.
  • Life with period certain: Similar to lifetime income, however you have select a certain number of years during which you want to receive benefits.
  • Lump sum: You are paid the full amount at once and are free to do with it what you choose.

How to collect life insurance benefits

The first step in collecting benefits is not much different than any other type of insurance payout. First, -you file a claim. Insurance companies typically have policies that require claims to be submitted within 12 months of the date of death - though that may vary by company.

In order to file a claim, you will need:

  • To submit a request for benefits. This is also where you request how you would like your benefits to be paid out.
  • Provide relevant information about the policy, such as details about the policy holder
  • Provide a death certificate as proof of death

If there is more than one beneficiary, you may need to each make a separate request for benefits.

Each insurance company may have a different approach, so you should consult them before undergoing the process of submitting a request to ensure it’s done correctly. If not done properly, you may face longer time periods to receive benefits - and the frustration that comes with going back-and-forth. 

How long will it take to receive benefits?

The length of time before beneficiaries are paid out can vary according to the insurance company.

Typically, the wait is not longer than 30 days. The Canadian Life and Health Insurance Association has shared data showing that most payments are issued within 10 days of the receipt of proper paperwork.

Social Security Death and Survivors Benefits (USA)

If the deceased paid into Social Security, their surviving spouse and children are eligible for survivors Benefits.

In most cases, the funeral home you’re working with will notify the SSA of the death. You can’t apply for benefits online, but are able to do so over the phone.

There are different types of benefits.

There is a $255 lump-sum death benefit for a surviving spouse or child (in the event there is no surviving spouse). The application for this must be made within two years of the date of death.

There are also Survivors benefits, with specific rules around eligibility and total benefit amount. Benefit amount depends on the amount of time the deceased was working and their total “income credits” earned.

Ten years of work is equivalent to 40 credits. The younger the deceased is when they pass, the fewer credits needed in order to support the surviving spouse and dependent children.

Family members who are eligible to receive survivors benefits include:

  • A widow or widower age 60 or older (age 50 or older if disabled).
  • A surviving divorced spouse, under certain circumstances.
  • A widow or widower at any age who is caring for the deceased’s child who is under age 16 or disabled and receiving child’s benefits.
  • An unmarried child of the deceased who is one of the following:
  • Younger than age 18 (or up to age 19 if he or she is a full-time student in an elementary or secondary school).
  • Age 18 or older with a disability that began before age 22.

Canada Pension Plan Benefit and Survivors Benefits (Canada)

Most Canadians pay into the Canada Pension Plan (CPP) throughout their lives.

Benefits generally begin at age 65, though some may opt to start as early as 60 or as late as 70.

Upon death, the federal government pays a single lump sum of $2,500 to the estate - providing the executor has applied to receive it.

The application can be completed online or via paper application. It should also be completed within 60 days of the date of death. From there, the government undergoes a review process which typically takes between six and 12 weeks.

There are other benefits given to the spouse or dependent children. You are only eligible to apply for these benefits as executor if you are one of the two.

  • Survivor’s pension: To qualify, you have to be legally married or the common-law partner of the deceased. If you’re over 65, you receive 60% of their eligible pension. If you’re under 65, you receive a flat-rate payment and 37.5% of their eligible pension if you’re not currently receiving CPP benefits yourself.
  • Benefits for children under 25: An executor cannot be a minor and it’s unlikely someone under the age of 25 who is still attending school full-time will be named executor. However, if you are an executor, you can choose to help guide those eligible for this benefit to apply. It is only applicable if the deceased was disabled and receiving disability benefits or if a child is under the age of 18 (or under the age of 25 if they are attending a full-time recognized school or university).

For more information, contact the Canada Pension Plan.

Next in the Executor Duties Checklist, managing the Trust Account.