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Death benefits — Part IV
There are certain benefits that are designed to pay-out at the time of death. In order to resolve any outstanding balances, you will need to gather the proper documentation for each. In this section, we will cover proceeds from:
HerTip: If your spouse belonged to a credit union, a labor union, the American Legion, a college alumni group, or other organizations, you may be eligible for insurance coverage or assistance programs. Contact the group’s administrator directly for more information.
Life Insurance Policies
In many cases, spouses are named as the beneficiary on any life insurance policies that may be held. In order to file a claim on your spouse’s policy, you will need a copy of the death certificate, and the process will most likely take a couple of weeks.
Depending on the type of policy your spouse held, you will most likely have several options regarding the form in which you will actually receive payment from the insurance company, such as a lump sum, interest payments, or an annuity.
HerTip: Since you may have designated your spouse as the beneficiary on your own life insurance policy, it may be necessary to re-evaluate your policy now as well.
For more information on life insurance policies, please visit our life insurance center. Go there now.
Social Security
Social Security makes special provisions for widowed women and their families. Upon your husband’s death, you will receive a $255 death payment, meant to help pay for the burial and funeral services. In addition, a widow may be eligible for survivor benefits if she or her deceased husband earned the credits necessary for retirement benefits, and she is:
- over 60 years old
- over 50 and disabled
- any age and caring for a child under age 16.
The amount of the payments depends on the age of the surviving spouse and the amount the decedent would have received.
HerTip: By law, a spouse is always the beneficiary of her/his spouse’s pension plan unless they specify otherwise.
How do I “file” to receive my Social Security benefits?
In order to receive Social Security checks, you must first “file” for benefits. To file for survivor’s Social Security, speak to a Social Security representative at 1-800-772-1213 or contact your local Social Security office.
What documents do I need to file for Social Security?
- The Social Security number of the beneficiary
- The Social Security number of the deceased
- The death certificate
- The marriage certificate (if applicable)
- The bank account number of the beneficiary
How do I collect my Social Security?
After you have filed for benefits, Social Security checks are mailed to you monthly from the Social Security Administration, or you may set up a direct deposit.
Will I be taxed on my Social Security?
Yes. 85 percent of your Social Security benefits are taxed depending on your situation.
Want to make sure your payments are on track?
You can call the Social Security Administration office toll free at 1-800-772-1213 or contact them on the Web at www.ssa.gov for a free personal earnings and benefit estimate statement. This will tell you how much government records say you have saved for Social Security.
HerTip: As a rule, the government will only fix errors up to three years, three months and fifteen days after they occur, so if you think you may have a problem with your Social Security payments, don’t wait to give them a call.
Employee Benefits
Through an employer, your spouse may have had insurance, a retirement plan, vacation or sick pay, and other benefits to which you are entitled. You will need to contact the human resources director at their company for a complete list of these benefits and information on how to proceed.
COBRA
You are eligible for COBRA heath coverage in the event of the death of a spouse who was still employed by the company. COBRA covers you and the former employee’s dependents for at least eighteen months and up to three years following the time of death if you have dependant children.
Retirement Accounts
If you are the beneficiary of your spouse’s retirement accounts, you will need to make decisions regarding the transfer and distribution of the assets in those plans. These decisions may have a significant impact on the ultimate amount received from the retirement account.
- You will have the option to roll the decedent’s retirement plan into your own IRA and take distributions based upon your own required minimums.
- You will have the opportunity to name your own beneficiary on the retirement plan.
Veterans’ Benefits
If your spouse was a veteran who received a discharge other than dishonorable, you will need to contact Veterans Affairs, formerly the Veterans Administration, to see if you are eligible to receive survivor’s benefits. Burial in a national cemetery is free for veterans, and you may receive money for related expenses, such as the cost of a headstone and funeral or cremation services. Additionally, if your spouse was receiving disability benefits you may continue to receive payments. You will, however, need a record of his military discharge records. Contact the Department of Veterans Affairs to obtain one. The VA typically has a toll free number in most states.
Continue to: Widowhood V: Budgeting and Credit Management