Death Benefits

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 What Is a Death Benefit?

A death benefit can be described as a payment given to a survivor designated by a person upon the person’s death. Often it is a benefit one family member or spouse provides to another. The benefit might be a benefit of employment, an insurance contract, or state for federal law. For example, one spouse might have a life insurance policy that insures their life and pays a benefit to their surviving spouse in the event of the insured spouse’s death.

Death benefit payouts can include money from a deceased person’s pension plan, a retirement account, or proceeds from a casualty insurance policy. In some cases, the payout may be subject to taxation. It might be paid in one lump sum or periodic payments.

In addition to employment-related death benefits, numerous government programs also provide family members with certain death benefits. For example, when a person receiving Social Security retirement benefits passes away, their surviving spouse is eligible for survivor benefits and may collect 100 percent of the deceased spouse’s benefit. The amount of the payment depends on whether the deceased spouse reached full retirement age before they claimed their social security benefit.

The survivor benefit amount would be less than 100 percent if the deceased spouse started receiving their Social Security retirement benefit before they reached their full retirement age.

Another example is the federal law allowing survivors of U.S. Armed Forces veterans to collect various lump-sum payments. Some may be contingent on the deceased veteran’s status, e.g., whether they were on active duty or retired at their passing. Most veterans who did not receive a dishonorable discharge are entitled to a burial benefit from the Veterans Administration. A spouse or minor child of a veteran is also eligible and, in some cases, the unmarried adult dependent child of a veteran.

The surviving family members of certain federal government workers, such as railroad or postal workers, may be entitled to a lump-sum payment after a relative passes away. Under the Railroad Retirement Act, a monthly benefit may also be payable to the surviving spouse, children, and certain other dependents of a railroad employee, if the employee was insured under the Act at the time of death. Sometimes, lump-sum death benefits may also be paid to certain qualified survivors.

Another example is the law in some states which provides a death benefit to the survivors of victims of certain crimes. For example, in Maryland, the state’s Department of Public Safety and Correctional Services pays a one-time death benefit to the surviving spouse, child, dependent parent, or estate of a person who dies due to performing their duties for a qualified Maryland Public Safety Organization.

The Maryland government also benefits the qualified surviving family member of a Maryland resident who died in service in the U.S. Armed Forces in Afghanistan or Iraq. Other states offer similar benefits to survivors of crime victims and veterans.

What Should I Do If I Am Denied a Death Benefit?

If a person believes that they are entitled to a death benefit because a spouse or family member has passed away, they first want to determine where and how they should apply for the benefit.

They want to determine whether a government agency, e.g., the Veterans Administration or a private company, would pay the benefit. Usually, a life insurance policy is issued by a private insurance company. The person would want to locate the life insurance policy and contact the company that issued it for information about how to apply for the insurance payout.

If a contract is involved in the death benefit, e.g., an insurance policy or an employer’s human resources policy manual, a person wants to locate and review a copy. In addition, they may want to obtain death certificates, receipts for payments or contributions to different plans, and any other items connected to the claim for a death benefit.

When people apply for a benefit, they want to keep a copy of their application and any submitted documents. They also want to keep communications from the agency or company to which they applied regarding any decision on the application.

If the agency or company that denies a benefit sends a person a letter, it may tell the person how to appeal the decision. The person denied the benefit must read such a communication carefully and note any deadlines for filing an appeal, i.e., a challenge to the denial.

Hiring a lawyer is not always necessary. If a benefit is paid, then there is no problem. However, if a person feels that they do not understand how to apply for a benefit or how to challenge a denial, they should consult a lawyer for help. It is also important not to wait but to promptly act so deadlines are not missed.

What Are Some Reasons Why My Death Benefit Could Be Denied?

In some instances, a government agency may deny a death benefit to the family of a deceased person. This can be especially hard on a family who lost their loved one because they served their community as a soldier, a police officer, or a firefighter.

All death benefits are paid because a valid contract provides for it or a state or federal law requires it. The payment of a benefit may be denied because the person who applies for it does not qualify to receive it per the law or contract that defines who has a right to the benefit.

Of course, it is always possible for the person who works for the government agency or company that decides whether to accept or deny an application for a benefit to make a mistake and deny an application when it should be accepted.

Some valid reasons for denying an application for a death benefit might be as follows:

  • Denial on the Basis of Duty and Uniform: This refers to the rule in the case of some veterans benefits, but not all of them, that the deceased must have been killed in the line of duty; again, this depends on the nature of the benefit;
  • Denial on the Basis of Time of Birth: This denial concerns the law or a provision in a contract that determines whether or not the deceased’s surviving children can collect.
    • In some cases, the child or children may only qualify to collect a death benefit if they were already alive during the deceased’s lifetime. For example, a child who had not been born before their parent passed away may not qualify for a death benefit;
  • Denial on the Basis of Invalid Marriage or No Marriage: If the government agency or company finds that a marriage is not valid because it was coerced, a sham, or entered into due to fraudulent misrepresentations, then the government or company might decide to terminate a surviving spouse’s death benefits. Or the government agency or company might discover that two people were never legally married. This might defeat an application for a death benefit;
  • Denial on the Basis of Manner of Death: If the deceased passed away in a manner that is not covered under some type of insurance policy or employment contract, then the company that issued the policy may deny the beneficiary’s application for a death benefit. For example, most life insurance policies do not pay a benefit if the insured person passes away by suicide;
  • Denial on the Basis of Termination of Employment: Sometimes, a person is entitled to certain insurance benefits while employed. However, if their employment is terminated for whatever reason, the person is no longer owed the benefit by their former employer.

Again, an application for a death benefit can be denied because the person who has applied for it does not qualify to receive it. However, sometimes the person who decides might make a mistake.

Do I Need the Help of a Lawyer for Help with My Death Benefit Issue?

If you are a family member and believe you are entitled to receive a death benefit when a loved one passes away, you may need the help of an insurance lawyer. You may not know how to apply for the benefit or have applied and been denied. Your attorney can help you submit a complete application. If the benefit is denied, your lawyer can help you file an appeal or determine if your application was denied by mistake.

If a government agency or company insists on denying your complete application and you qualify to receive a death benefit, your lawyer can represent you in court if you file a lawsuit to get the death benefit that you are entitled to receive.


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