After the death of a person covered by a life insurance policy, the beneficiaries of the policy should file a claim with the life insurance company, and they must provide a copy of the deceased person’s death certificate. If the claim is approved, the beneficiaries may receive a payout in one of several ways, including:
- Lump sum - The entire amount of the benefit may be paid at one time, allowing beneficiaries to use these funds to pay outstanding expenses or invest them as they choose.
- Annuity - A benefit may be paid to beneficiaries in installments, providing regular income for a certain number of years. This allows beneficiaries to not only receive the money they need on an annual basis, but they will also receive interest on funds that have not been paid out. However, while life insurance benefits are not taxable, interest earned on these benefits is considered taxable income.
- Payout checkbook - Some insurers will hold benefit funds for beneficiaries while allowing them to withdraw money as needed by writing checks. Funds held by an insurer may also generate interest until they are withdrawn.
- Life income - Some plans may allow beneficiaries to receive a fixed monthly income based on the amount of the benefit, their age, and their life expectancy. The beneficiary will receive a guaranteed amount for the rest of their life, regardless of whether they die before or after they reach the age to which they are expected to survive.
- Pre-death payments - While life insurance benefits are usually paid after a person’s death, in some cases, they may be available while a person is still alive to offset the costs of medical care for a terminal illness.
Contact a Des Plaines Life Insurance Attorney
After a person’s death, the prompt payout of life insurance benefits is essential, allowing a family to cover their costs and meet their ongoing needs. If a life insurance company has denied your claim or delayed the payout of your benefits, Drost, Gilbert, Andrew & Apicella, LLC can work with you to help you receive the benefits you deserve. Contact our Palatine life insurance claims lawyers at 847-934-6000 to arrange a personalized consultation.
About the Author: Attorney Ken Apicella is a founding partner of DGAA focusing in the areas of personal injury, employment, insurance coverage disputes, and civil litigation. Ken earned his J.D. from DePaul University College of Law in 1999. He has been named a SuperLawyers Rising Star and a Forty Illinois Attorneys Under Forty to Watch. Ken has written and lectured for the Illinois Institute for Continuing Legal Education and regularly serves as a moderator at Northwest Suburban Bar Association's Continuing Legal Education seminars.