What to do when a Physicians Mutual account holder dies

The Life Claim Information form (form L-SV-0049-AA) routes this in a specific way. If the beneficiary predeceased the insured, the claimant supplies Next of Kin information for the INSURED; if the beneficiary died after the insured, they supply it for the BENEFICIARY. If an estate has been opened, you instead submit a copy of the Court Order of Appointment. If no estate is being administered, the form states that each of the insured's immediate surviving next of kin will be required to sign a release and indemnity form before benefits can be issued, and it walks a fixed order of succession: surviving spouse, then children, then parents, then siblings. Physicians Mutual publishes a separate Next of Kin form for this, written to be certified by a funeral home representative, which is mailed to Physicians Mutual Insurance Company, 2600 Dodge Street, Omaha, NE 68131-2671 or faxed to (402) 633-1604.

Use form LX14, Change of Beneficiary Designation for Life and Health Policies, from https://www.physiciansmutual.com/web/customer-center/forms. Two things are specific to Physicians Mutual. First, the trust has to be written the way the form directs: the trust name plus its execution date, in the form's own example format "John Doe, Trust, dated May 1, 2014." Second, Physicians Mutual will not take a short certificate of trust here. The form requires a copy of the trust including the powers and limitations of the trustee, the date executed, and the signature page. Mail the completed form to Customer Service, PO Box 3272, Omaha, NE 68103-0272. Note this is a different PO Box from the claims address, and there is no way to make a beneficiary change inside My Account: the company's own FAQ says to complete and mail the form.

Transferring ownership is a separate form from a beneficiary change: form LX511, Ownership Change Request for Life Policies (Absolute Assignment). Name the trust as the new owner, and mail the signed form to Physicians Life Insurance Company, Life Customer Service, PO Box 3313, Omaha, NE 68103-0313. The change is not effective until Physicians Life approves it under the terms of the policy. The trap is printed on the form itself: outside of juvenile life policies, a change of ownership does NOT change the beneficiary designation on file, so an ILIT that becomes the owner is not automatically the beneficiary. Complete the beneficiary section of LX511 as well, or the death benefit will still be paid to whoever is currently designated. On juvenile life policies the rule inverts and the new owner does become the beneficiary. The form also has a Medicaid Acknowledgment checkbox to tick if the transfer is being made for Medicaid reasons. Physicians Mutual does not draft trusts.

The Life Claim Information form asks for a certified death certificate for the insured "showing the cause and manner of death," so the abbreviated fact-of-death certificate that some states issue by default will not clear the claim. Order the long-form certificate. The form also asks for a copy of the obituary if one exists, and for any assignment of benefits. Payment is by check: Physicians Mutual states it does not offer direct deposit for benefit drafts. One more thing for executors of a final-expense policy: the guaranteed issue Whole Life and Modified Whole Life policies carry a limited benefit period, so a non-accidental death in the early policy years pays back the premiums paid plus a percentage rather than the full face amount. Check the issue date before assuming the full death benefit is due.