Life Insurance Payout: How Does It Work?
To avoid adding unnecessary stress during difficult times, it is highly advisable to familiarize yourself with the life insurance payout process. By understanding the intricacies involved, you can alleviate concerns about claiming insurance coverage in adverse situations. Take the time to educate yourself and ensure peace of mind when it matters most. Continue reading to learn more about life insurance payout.
How Long Do You Have to Claim Life Insurance?
It is true that claiming life insurance is necessary after losing your loved one. But it is not on the priority list. Take time, gather yourself up, and gradually get into everyday life.
There is no time limit for claiming life insurance. But this is the legacy that your loved one has left behind. There are upcoming costs, and these need to be paid. Claiming life insurance will help you get funds for running your life and meeting the expenses. File the claim as soon as you are ready.
What Are the Payout Options?
When you receive the life insurance payout, you will be asked to choose an option as to how you want to be paid. Some of the common options are:
Lump Sum
The term ‘lump sum’ is self-explanatory. You get the whole payout at a time. Financial experts always recommend this payout option as this is the simplest one. Once you get the whole money, you can use it in the required ways. You can also make investments of your choice for the future. The best thing about this option is that you are in charge of the money your loved one had so caringly saved for you. The insurance company has no more role to play.
Installments
You can also get the life insurance payout in installments. This means the insurance company pays a certain amount of the money in regular intervals (monthly, quarterly, or yearly). The real money gets paid out over a particular period.
With this option, the payout gets exhausted after that particular time. In such cases, lifetime installment plans are available. But these plans have serious drawbacks.
This is why the lump sum option is the clear winner when it comes to the life insurance payout option. With all the money under control, invest it as you want. Moreover, you can leave a long-lasting legacy for your loved ones.
Interest
This payout option is the least chosen one. You let the life insurance company invest the money on your behalf. You will get the interest that the payout is earning. But you will not get the payout amount. The investment company invests the money in its way, keeping the mammoth payout under its control, which your loved one had intended for you to use.
Protect yourself and your family with the right insurance!
A life insurance policy offers extended protection and security for your family when you are no longer around. If you haven’t got a life insurance policy yet for your family, contact us at Jackstone Insurance Agency immediately to get in touch with our experts. Call us at (925) 516 7934 for more information on life insurance and other insurance policies.
