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How to Make a Life Insurance Payout Go Smoothly

Having a life insurance policy is an important step in protecting your loved ones’ financial future. Of course, no one ever looks forward to the day they need to make a claim on their policy. And when that time comes, it can be difficult to navigate the stress of losing a loved one while filing a life insurance claim and receiving the life insurance payout.

Fortunately, the actual filing of the life insurance policy claim itself is not very complicated. 

Steps to Take When Making a Life Insurance Claim

Contact SelectQuote 

What’s the first thing you should do after the death of the insured? According to SelectQuote Licensed Agent and Conversion Supervisor John Schmidt, SelectQuote customers should call SelectQuote’s special PolicyHolder Services department. “We keep copies of all the required claims forms that the carriers need to have completed to process a claim,” Schmidt said. 

By calling SelectQuote directly, the client – in this case, the beneficiary – can find all the information they need about required documentation as well as their policy.

Collect Required Documentation

Most importantly, you will need to provide the insurance company with an original death certificate. The funeral home who is responsible for your loved one’s arrangements will fill this out. Make sure to order a separate, original copy of the death certificate for the insurance company, because it will not be returned to you after submission.

Additional information needed in order to file the claim includes your loved one’s:

  • Name and date of birth
  • Social security number
  • Date of death
  • Cause of death
  • Funeral home information
  • Possibly other details regarding the death

Submit the Claim Form

Fill out all required information on the claim form and don’t forget to include the death certificate. It’s important to make sure you haven’t missed any required fields and that this is done in a reasonable time frame. 

Otherwise, it can lead to delays with processing your claim. 

Once you’ve done all this, submit everything to the insurance agency, and the claims process will begin.

Types of Life Insurance Payouts

When you file the claim, you as the beneficiary make a decision as to how you’d like the life insurance benefits to be paid to you. The choices available will depend on the type of coverage and policy held by the insured. 

Lump-sum Payout

This is one of the simplest and most popular options. The insurance company will send you a check, or a checkbook with funds available that match up to the lump sum. “So if you have a $100,000 death benefit, you’ll get a check for $100,000,” John said.


The life insurance policy pays the amount of the death benefit to the beneficiary over a certain, pre-specified amount of time. John also offered, “Whatever [amount of time] the client chooses, it’d be a good idea for them to consult with their financial adviser.”

According to John, lump-sum payouts and installments are by far the most common choices. 

Here are some of the other available payout options:

Life Income

The payment is made monthly, quarterly, or annually to the beneficiary based on their life expectancy. Payouts are guaranteed to last the rest of the beneficiary’s life.

Life Income with Specified Period Certain

The beneficiary receives a payment of a certain amount for a guaranteed time period. In this case, if the beneficiary dies long before the payouts are complete, the money is guaranteed to be paid to a contingent beneficiary for the remainder of the specified time period. Because of its guarantees, this option’s payout is lower.

Joint and Last Survivor Income

If the beneficiary and the deceased spouse shared a life insurance policy, the surviving spouse will receive a fixed amount as long as they are living. This also includes an option to designate an additional, third-party beneficiary, or add a period certain. Because of its guarantees, this option’s payout is lower.

Time Frame for Claims Processing and Benefit Payout

After correctly submitting your claim, you can expect to receive your money within two months. While every state has its own policies, all of them require the money to be paid in a reasonable amount of time. Insurance companies are also motivated to pay quickly so they aren’t charged for payment delay.

Many large life insurance companies have developed quick and efficient procedures for claims due to the sheer volume they process each year. Most likely, you will have your money in less than two months, as long as you’ve submitted all required information. 

At the very least, make sure to submit the death certificate to the insurance company as soon as possible. In most cases, the insurance company’s receipt of the death certificate starts the timer on how long they have to pay you.

Why Might a Life Insurance Claim be Denied?

Though most life insurance claims are approved, there are a few situations in which it could be denied. 

Almost all of these are a result of the two-year contestability period. That means that the policyholder dies within the first two years of life insurance coverage. In some states, the contestability period may be only one year. 

If, during the contestability period, the policyholder dies but made misrepresentations on their policy application, or the policyholder commits suicide, the benefit will not be paid. According to analysis in the Los Angeles Times, misrepresentation is the largest reason for claim denial. Claims in these categories will not be denied outside of the contestability period.

Other possible reasons for claim denials outside the contestability period include the following:

  • Lapse in policy with unpaid premiums
  • Death while committing a crime
  • Homicide committed by beneficiary

SelectQuote: Your Experts in Life Insurance

Buying life insurance is one important way to take care of your family’s financial future, even if you’re not there. The payout can help with mortgage payments, college tuition, and more. Choosing the right policy is of utmost importance.

It may seem complicated, but SelectQuote is by your side to help you make the best decision for you and your family. We’re proud to be America’s #1 term life insurance sales agency. We help you evaluate the different life insurance policy options until we find one you can feel confident about.

Contact us and receive your free quote today.

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