How Does A Life Insurance Payout Work?

  1. 12689 POINTS
    Ted Ratliff
    Owner, SFS Associates,
    Upon death the beneficiary has a couple options.   They can take the money in a lump sum, in which case they will receive a check shortly after filing the death claim, or they can annuitize and take the money in monthly installments ove a period of time or for life.  A good agent can help guide you according to your circumstances.
    Answered on May 29, 2013
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  2. 63333 POINTS
    Peggy Mace
    Most of the U.S.
    When the beneficiary receives a life insurance payout, the insurance company will work with them to help make the payout most beneficial for their situation. If there is a mortgage to pay off, taking the payout in a lump sum may work best. If the beneficiary needs the life insurance proceeds for income, taking the death benefit in monthly installments may work better. The life insurance company pays interest to the beneficiary on money left in the policy until it is taken out.
    Answered on May 29, 2013
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