How Long Does it Take for Life Insurance to Pay Out: Lawyers Explain How to Get Your Money Fast

The death of a loved one is a painful and overwhelming time. While coping with the loss of a loved one and making final arrangements, the last thing people want to think about is whether death benefits will be paid and how long it will take for the life insurance company to pay.  Having information on how to file a life insurance claim, what may cause delays, and how the life insurance payout works can help expedite the process.

A few factors can slow down the claim review process and make it more difficult for a beneficiary to receive their death benefit. To help you understand the life insurance payout timeline, our life insurance attorneys explain how long it takes to get a life insurance check on time. Call (888) 510-2212 for a free consultation

How Long Does It Take to Get a Life Insurance Payout?

Unless the claim is contested, the average life insurance claim review generally takes between 20 and 45 days. How soon the benefits will be paid depends on how fast beneficiaries submit claim paperwork, the laws governing the claim, the insurance company’s processing time, and the circumstances surrounding the insured’s death.

It is in the insurance company’s best interest to pay the claim as soon as possible, as it has to pay interest on the claim amount for any delay. However, many claims are still unfairly delayed or even denied.

Circumstances That Can Affect When Life Insurance Is Paid Out

Every claim submitted to the insurance company will have to go through a review process. In many cases, insurance companies keep their promise and pay the benefits to the beneficiary after the insured’s death. Very often, however, life insurance claims get denied for various reasons.

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Two-year contestability clause

If the policyholder dies within the first two years of the policy issue date, the insurance company must contest the policy. Life insurance policies contain a provision stating that the insurer is entitled to go back and review the life insurance application documents to make sure the policyholder did not make any material misrepresentation. If the insurer cannot prove that the insured misrepresented the application, the life insurance proceeds will be paid out promptly. Contesting the policy may take up to a year or even longer. In some cases, the claim may not be paid, and the beneficiary may have to resort to litigation to recover his life insurance payout.

You can read more about this in our article about the life insurance contestability period.

Incomplete Documentation or Information

The most common reason for claim delays is not providing the insurance company with all the requested documents. You have to fill out the paperwork correctly, provide a certified copy of the death certificate, and have all the documents the life insurance company requires to finalize your claim.

Policy Lapse

If there was a lapse in the life insurance policy before the insured person’s death, the claim might be denied since no coverage was in force at the time of the death. Contact our life insurance lawyers for a free consultation if your claim has been denied or delayed due to a life insurance policy lapse.

Suicide clause

If a life insurance policy contains a suicide clause, the insurer may refuse to pay the claim in case the insured committed suicide. Investigating the insured’s death may take several months and may also result in an unusual claim delay.

Read about the life insurance suicide clause.

Murder-Homicide Investigations

Another situation that may delay a claim payment is when the insured dies due to homicide. If the death certificate lists homicide as the cause of death, the insurance company will require the detective to provide a statement about the circumstances surrounding the insured’s death to ensure the beneficiary is not a suspect. If the beneficiary is a suspect, the insurer will delay paying the claim until the beneficiary is acquitted of the crime. In the case of an accidental death policy, a homicide investigation must conclude before the insurer will issue a payment. This happens because most accidental death policies exclude payment situations where the insured participated in a felony or an illegal act at the time of death. 

Read more about what policy beneficiaries can do when dealing with a denied life insurance claim due to murder

Please consult with one of our life insurance attorneys to avoid an unfair delay of death benefits. We can work with you to evaluate your case and help you expedite the payment on the delayed claim. We have successfully handled all the situations described above for life insurance beneficiaries.

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How to File a Claim to Get Your Life Insurance Check Fast?

Every life insurance policy has a provision outlining a procedure for submitting a claim. It usually describes how long you have to file a claim for benefits and how it must be filed. It specifies such details as the deadline for submitting a new life insurance claim, notice of claim, and proof of loss.

It is best to contact your life insurance company as soon as possible after the insured’s death. The claims representative will let you know the documents needed to review the claim. In order to expedite the claim payout, those documents must be produced quickly.

Here are the steps a beneficiary should take to promptly collect life insurance proceeds in case of death:

  • Obtain a certified copy of the death certificateA death certificate is a necessary document that serves as proof of death. It may be obtained through the funeral home or the vital records department. 
  • Contact the life insurance company – Notifying the insurance company as soon as possible after a loved one’s death may expedite payment of your life insurance claim. 
  • Gather the documents you need to file a claim – Every insurer has a specific list of required information you will need to submit to collect the death benefits. It usually includes a certified copy of the death certificate, the original policy, completed claim forms, the police report, the toxicology report, and the autopsy report. You can choose how you would like to receive your life insurance death benefit on the claim form.

How Is Life insurance Paid Out to Beneficiaries?

Beneficiaries of life insurance payouts choose how they would like to receive the money, whether in a lump sum or installments, and there are typically a few options. The beneficiary has the right to request interest on the total payout if the claim was not paid within a reasonable time.

  • Lump sum – The default life insurance payout option of most policies is a lump sum of the death benefit, meaning the beneficiaries get all the money at once. This is a single payment, usually in the form of a check, given to the beneficiary once the insurer has approved the amount. That single payment would be for the entire amount of the death benefit minus any outstanding loan amounts, if applicable.
  • Annuity payout – A life insurance annuity provides a steady income stream to the beneficiary. The insurer pays out the death benefit regularly over a set period while they keep the remaining amount in an account that earns interest until it is fully paid out. Annuity options may be for a fixed amount (equal payments are paid until the balance is exhausted) and for a fixed period (equal installments are calculated and paid over a certain period of time.)
  • Lifetime income – Beneficiaries can receive payments that last for the rest of their life. The amount received depends on the age and the size of the death benefit.
  • Life income with a period certain – Under this option, the beneficiary receives guaranteed payments for life or over a certain period (five, ten, or 20 years), whichever is longer.
  • Specific income payout – Beneficiaries can receive monthly installments over a set period. This option lets the beneficiary decide the amount of each payment and the time frame over which they want to be paid. Payments are made until the death benefit is over. 
  • Interest income – Some life insurance companies allow beneficiaries to keep the life insurance payout in an interest-bearing account and receive interest payments on a set schedule. The original benefit can be paid to a secondary beneficiary when the beneficiary dies.

Read more on our post about how does life insurance work.

lawyer for life insurance claim

Consult with a Life Insurance Attorney if Your Payout Was Delayed or Denied

It is important to understand how life insurance payout works to make sure your rights are protected. It is also important to consult with a lawyer in life insurance law, who will understand the financial difficulties you are going through after a loved one’s death. We are here to help and advise you of the best course of action.

Below are some delayed or denied claim cases that we resolved in favor of the beneficiary:

We offer free consultations and work on a contingency fee basis, which means there is no legal fee unless you win and receive your life insurance payout. If you or someone you know have issues with a denied life insurance claim, call us at (888) 510-2212 to speak to one of our lawyers.

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About the author

Attorney Tatiana Kadetskaya has over 10 years of experience in life insurance law representing beneficiaries and policy owners. She is best known for successfully collecting denied and delayed claims and settling complex beneficiary disputes and interpleader lawsuits.

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