How Soon Does Life Insurance Get Paid Out?
When it comes to making sure that your family is taken care of when you're gone
, buying a life insurance policy is one of the best things that you can do. While most people understand how life insurance works in general, they may not understand how a life insurance payment works specifically. Understanding how fast your life insurance policy will pay out can help you when it comes to planning ahead financially.
The Process
The process of getting a life insurance payment requires a little bit of work on the part of the beneficiary of the policy or the executor of the estate. Once the policyholder passes away, you have to complete a form for the insurance company. Typically, the payout request form is pretty basic and asks for some simple information such as the name of the policy holder and the date of death.
In addition to filling out the form, you will also have to provide a certificate of death. Until the insurance company gives the form and that certificate of death, it cannot process any payments for insurance policies.
Time Frame
Most insurance companies have a goal of paying out on life insurance policies within 90 days of the death of the policy holder. In many cases, this can be done much faster than 90 days. A lot of it depends on how quickly you or the executor fills out the application and submits it to the insurance company. If the application and the death certificate are not presented in a timely manner, it can extend the amount of time that it takes to complete the process.
Using the Money
Although the life insurance policy may payout relatively quickly, it does not necessarily mean that the money can be used right away. The assets of the estate have to pass through probate before they can be distributed to the beneficiaries of the estate. Any outstanding debts of the deceased individual have to be paid off before the beneficiaries can take their share of the estate. This means that if you are the beneficiary of the policy, you may have to wait a little bit longer to get access to your money.
Getting an Insurance Policy
If you are interested in buying a life insurance policy, getting some life insurance quotes can help you get the information that you need to make a decision. When getting life insurance quotes, it may be to your advantage to ask the insurance company how long it takes to pay out on a policy after death. This may help in making your decision.
by: Shaun Greer
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