In order to receive life insurance money, you must be named as a beneficiary on a life insurance policy. In most cases, you won’t be surprised that you’re in line to receive life insurance benefits. This is because you’re likely to be the beneficiary of only those policies carried by your spouse or parents. Once the carrier of the policy on which you’re named as a beneficiary passes away, you’ll need to file a benefits claim with their life insurance carrier. This will require you to adhere to the terms of the policy and fill out a fairly involved set of documents.
How Long Should It Take to Receive Life Insurance Money
Once you file your claim, you’ll need to make yourself available to the insurance company in case any complications arise. If you’re named as the sole beneficiary on the policy in question, your case should be relatively straightforward. You’ll need to choose whether you’ll receive your payout as a lump-sum payment or as an ongoing annual disbursement. If you opt for the former option, you could receive the entirety of the payout to which you’re entitled within two weeks.
If you opt for the latter option, you could receive your first payout in just 10 to 14 business days. In both cases, your payouts will come in the form of an official bank check. If you prefer to receive your payments electronically, you may be able to provide your insurance company with your bank account information and receive your funds via an electronic funds transfer.
Life insurance policies that involve several named beneficiaries tend to be more complicated than single-beneficiary schemes. As one of several beneficiaries on the same policy, you might have to wait for an additional period of time before you become eligible to receive your benefits. Fortunately, you’ll almost certainly be protected by state laws designed to:
- Discourage insurance companies from delaying
- Deferring payouts to beneficiaries
Depending upon the laws in your state, your provider will be required to transfer the first benefit installment to you within 30 to 45 days of the date on which you file your claim. If you don’t receive a payment within this time frame, you’ll be entitled to additional payments in the form of “statutory interest” on the total amount of your death benefit. Since this interest is liable to total upwards of $1,000 per year, it’s unlikely that your provider will delay your payout unless it has a legitimate reason for doing so.