If you are wondering how long it takes for a life insurance company to pay out life insurance benefits, you should know that there are a variety of factors that determine this. How long it takes to receive the payout depends on how the policy is structured, and how long it takes the insurer to conduct any investigations they need to complete, because these investigations can delay a payout. But for the most part, the average life insurance payout time is not as long as you might think it is.
The Typical Life Insurance Payout Time
The typical amount of time it takes for a life insurance company to pay benefits ranges from 30 to 60 days, but it can take as little as 2 weeks if the claim is straightforward and cleared quickly by the insurance company.
Factors That Go Into Determining Life Insurance Payout Period
If you are listed as the beneficiary of a loved one’s life insurance policy, after they pass away you will need to gather all of the necessary documents, such as a copy of the death certificate, in order to submit a claim. Most states give life insurance companies up to 30 days to review a claim and make a decision. Different factors can prolong the process, though, such as if there are multiple beneficiaries instead of just one beneficiary.
In addition, if you choose to take the life insurance payment as an annuity, instead of receiving a lump sum, you could receive your first payment as soon as 10 days after the claim is processed.
Other factors that can result in a longer wait time for a life insurance payout include:
- The length of time after death that the claim is filed.
- If you have all the documentation required for the claim.
- If a claim form that you filled out is not correct or incomplete, you will have to resubmit the form, with the correct information, which can prolong the claim process.
- If the policyholder died by suicide within two years of purchasing the policy, this could delay the payout up to a year. If the policyholder died by suicide within the contestability period, you could be denied the life insurance payout completely.
- If the policyholder was murdered, the payout will be withheld until the investigation by authorities clears all beneficiaries of the crime.
If you want to make sure that your family is completely taken care of when you are gone, you need to find the right life insurance policy for you AND know the rules and clauses of the specific policy you choose to go with.
The best way to find the right policy for you is by working with a licensed agent from a top-rated insurance company. They can help you find a policy with affordable rates, and give you ideas for how to cut costs. We have listed some companies to work with that will be able to find you the most coverage for the least amount of money. Always check multiple sites to make sure you have bargaining power and to know the different advantages of each company. Make sure a hard time for your loved ones isn’t made harder by a financial burden, check life insurance rates today.