How Long Does It Take To Receive Life Insurance Death Benefits

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  • Post last modified:September 12, 2020

How long it takes to receive life insurance death benefits is dependent on a wide range of factors. It may take a 30 days, 60 days, or even years, depending on the provider.

In some cases, the amount of money involved, the will left behind by the diseased, may be considered.

Other factors include the cause of death and the laws governing insurance payments. Also, the company’s procedure must be adhered to.

Here are the details.

Company Rules

rules of life insuranceThe company’s rules and regulations are important and must be considered.  In most cases, they stipulate when the beneficiaries should receive the payment. The circumstances under which the policyholder died will also be considered.

Also, the beneficiaries need to adhere to the company’s regulations when making a claim. Filing the claim forms immediately could help. It allows the company to process the payouts faster.

Council Rules

American Council of Life Insurers has rules that must be followed. One of the rules stipulates that a life insurance claim must be paid within 30 days after the beneficiary submits the claim forms. However, most companies will pay within the first 10 days if the documents are in order.

How The Payout Works

Typically, beneficiaries including the spouse and children are entitled to the payouts. But insurance companies may only pay people listed in the policy as beneficiaries. The policy is treated as a legally enforceable contract, and so it will be followed to the later.

How Payments Are Made:

Lump-Sum Payment

Depending on the company and the policy, death benefits can be paid in a lump sum or installment. When paid in a lump sum, the beneficiary receives the full benefits in just one payment. But, installment payments could be made over time.

The beneficiaries may also choose to draw the interest earned only. Here, the provider will need to pay the interest the principal earns until it is paid out fully. The company may also want to pay both the interest and the principal in a specified period.

Fixed Period

In this case, the insurance company will pay both the interest and the principal for a certain period. Once the period lapses, the payments will have been concluded.

Fixed Amount Payment

The carrier may decide to pay a specified amount of money in fixed intervals. They will make this payment until the beneficiaries receive the entire amount due.

Increasing Benefit

Here, the amount the beneficiaries receive may increase at a predetermined rate. Also, it could increase over a stipulated period. It could increase by 4 or 5%.

Life Income Option

It allows the beneficiary to continue receiving the payments until they die, read more.

Instances That May Lead To Withholding Of The Money

Some issues may arise and lead to the holding up of payments. They include:

Incomplete Documentation and False Information

When the claim form is not filled well, it may be difficult for the insurance company to process the payment. Besides, you will need to provide a certified copy of the death certificate.


Most life insurance companies have a suicidal clause. The clause may provide some form of the embargo. For instance, if the policyholder commits suicide within 2 years after signing the policy, the beneficiary may not get the payment.

So, if the insurer suspects that the policyholder committed suicide, it may need to be investigated. This may delay when receiving benefits.

Death During Waiting Period

If the policyholder dies before the end of the two-year waiting period, the insurer may refuse to pay. Further, if the diseased failed to disclose a condition, there could be trouble. It may take the insurer some time to investigate the death. Ultimately, it may delay payment.

How Fast You File a Claim

The quicker you file a claim after a policyholder dies, the more likely you will receive the benefits on time. A few companies will allow you to file the claim online. But, even in such a case, it may be necessary that you get the documents in order.

For instance, you may be required to submit a certified death certificate. The certificate must be certified before the processing of the forms commences. The carrier will review the information submitted to confirm the accuracy of a claim. If everything is ok, the beneficiaries may receive their payout within 14 days.

But, a delay in submitting any of these documents could make it difficult for the insurer to process the benefits.

Lack of Information

If you do not know that you are listed as a beneficiary, you may not make a claim. The state law requires that insurance companies cross-reference the SSA death master file against the list of policyholders.

The policy carrier will then determine who should receive the benefits. It needs time to do all this, and it may take a bit of time.

Lack of Supportive Documents

If the beneficiaries do not fill a claim form, it may take time before they receive the death benefits. Even where the claim form is filled, getting the right documents could be challenging.

It may require that materials move forth and back for some time. It wastes time and may delay payment.

Difficulties in Finding a Copy of the Policy

Among the documents, you may need to provide before you receive benefits is the policy contract. If the deceased did not disclose where the contract is kept, it could make it difficult to start the process.

So, even though the policy must be stored in a safe place, the beneficiary should know how they can get a copy.

Generally, one should be able to receive death benefit payments within 30 days. But, they must follow the steps correctly. It is a simple process that starts by contacting the company immediately.

You should inform them of the demise of the policyholder. Next, get certified copies of the death certificate and fill the claim form. You will then need to attach all relevant documents before submitting them.

Linda Chavez

I'm a burial & senior life insurance expert, independent agent, Founder & CEO of Seniors Life Insurance Finder. I have been working in this sector since 2004 and established my own company in 2014. I have a team of seven members, and we are trying hard to share the knowledge we've gathered. We know how difficult often it is to find an affordable policy. Hence, we are doing our best to help you.