Life insurance is a safety net that will help your family carry on financially if something unfortunate were to happen to you. Here at Malden Solutions, we understand that understanding policies can be overwhelming. That’s why we have full-service insurance brokers that will break down the benefits of life insurance and find a suitable plan tailored for you. You may have children that need to pay for their education or a spouse that will need help with the mortgage or other finances. That’s why it’s vital to understand how payouts work and when your beneficiaries will receive them. To learn more about how payouts work regarding life insurance, keep reading!
When are Benefits Paid?
After the insured person passes is when beneficiaries receive the payouts. Beneficiaries have to file a death claim with the insurance company by submitting an official copy of the death certificate. Typically, most states allow insurers up to 30 days to review the request. During this period, they can pay out the money, deny the payout, or ask for more information. Most companies take no more than 60 days to pay but technically, there is no set time frame. However, most companies are motivated to pay out the money ASAP.
What Would Cause a Delay in Payouts?
There are a few reasons behind there being a delay in payouts. Beneficiaries may face up to one year in a setback for payouts if the insured party passes within two years of the policy being active. During this time, the insurer can investigate to make sure that fraud is not occurring. If the insurer, cannot prove so, then the beneficiary will typically receive pay. Unfortunate circumstances, such as suicide and homicide, could delay benefits, especially if the recipient needs clearance amid an investigation. If charges ensue, they need to drop before payouts can occur. Here are other reasons behind delays:
- The insured party was involved in illegal activity during their death
- The insured party wasn’t honest about their policy application
- The insured party didn’t tell the truth about their health or risky activities they participated in
How are Payouts Paid
You, the insured party has a part in the process of how payouts have distribution. Our brokers can comprehensively walk you through your options. Here are some options that you have:
- Lump-Sum-Traditionally, this is how payments occur. This option is usually the default where all the money comes at once.
- Installments and Annuities– Newer policies allow the money to come in payments that accrue interest throughout the lifetime of the beneficiary.
- Retained Asset Accounts– If your policy is abundant, some insurers allow you to write checks against the balance. The beneficiary won’t be able to make a deposit, but this will add to the interest.
Partner with Malden Solutions Today
Malden Solutions has a wealth of expertise in providing employer insurance solutions, HR solutions, and individual insurance solutions to businesses both big and small. Our team of seasoned professionals can help you navigate the rapidly-changing world of insurance with ease. We partner with businesses and individuals throughout the country to provide our dedicated services for employee benefits but also work within our surrounding communities in Maryland, Northern Virginia, and Washington, D.C. Contact us today to learn more about how we can provide effective, dynamic solutions for your business. Stay connected with us on Twitter, Facebook, and Linkedin.