How Long Does It Take to Get Life Insurance Money?

Read to find out how long it takes to get life insurance money, how life insurance payouts work, and how you should go about it
By Duncan E.
Updated Sep 26, 2022
A man finding out from his insurance agent how long it will take to get Life Insurance money.
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Getting fast access to life insurance money can ease the burden by helping you pay for final expenses like funeral costs and settling bills.

Most life insurance companies ensure that people eligible to receive a payout from a policy get it quickly. 

However, it can be stressful if a loved one has passed away and you don’t know how or when you’ll receive a policy death benefit.

This article will go over how long it takes to get life insurance money, how life insurance payouts work, and discusses how you should go about it.

How Long Does it Take to Get Life Insurance Money?

Most of the time, a life insurance payout is quick and you can get your money in a few days. However, it can take a long time to get paid if you don't know the policy number or a dispute with the insurance company.

The way you receive your payment will increase the length of time it takes for a policy to pay out. For example, installment-based payment plans will affect how long it takes to get the whole amount at the end of the payment.

How Long Does it Take to Get Life Insurance Money?

While people may think life insurance providers might be slow when paying claims, this isn’t the case. 

Life insurance companies get new customers and make their money because they build a reputation for paying claims. A life insurance company that doesn’t do this would quickly be out of business and could be subject to costly legal battles.

As soon as a beneficiary files a life insurance claim, most life insurance companies will start the process of paying out money. 

The industry standard for death benefit payouts is about 60 days. However, some insurance companies might do it in less time if the claim is approved. Often, people who make life insurance claims and have all of their paperwork can get them processed right away.

However, other factors might influence how long it takes for a policy to pay out into a beneficiary’s account.

If the payment is:

  • Via electronic funds transfer (EFT) it can take between one and four days to be transfered.

  • Via check, you’ll have to wait for the check to arrive and then deposit it into your bank account.

  • Large, your bank may hold the transfer for a day or two before depositing it as they perform checks for fraud.

Different Types of Life Insurance Payouts

The type of payment can also affect how long it takes to receive the full balance of the life insurance policy. Here are some of the common types of payment that life insurance companies offer:

  • Lump-Sum Payments: Lump sum payments are the most common type of payout. When the life insurance claim is completed, beneficiaries will get the whole amount in a single payment.

  • Installments: Payments in installments spread the life insurance death benefits over time. For example, six payments over a year or ten payments over ten years.

This will lengthen the time it takes to get the whole amount, but is helpful if the policyholder wants to guarantee that the beneficiary has income for several years.

  • A living annuity: A person can request that any money paid out to their beneficiaries be placed into a living annuity. This insurance payment option pays out monthly or yearly amounts for the rest of the beneficiaries’ lives.

  • Retained Asset Accounts: The insurance company will keep the entire amount but allow the beneficiary to withdraw from the balance. While the money is in the account, it continues to earn interest. The beneficiary has the option of withdrawing the whole amount at once or spreading payments out over time.

How to Claim a Life Insurance Death Benefit

Receiving a life insurance payout can be a complicated process. Here's a quick rundown of what you'll need to do if you're an insurance recipient who wants to get paid.

A life insurance claim is usually made by one of the life insurance beneficiaries, although anybody can do it. This means that someone else can file a claim on your behalf, such as a relative, friend, or lawyer. 

All that is required is for the individual to have the necessary documents. Remember that the life insurance payout procedure will only start when you file a claim.

Here are some tips to help you through the process:

  • Call the insurance company first to find out the plan’s details and more information about the claims process.

  • You’ll typically need a copy of the policyholder’s death certificate when making a claim. You can usually get this from the funeral home or by contacting your area’s office of vital records.

How Many Copies Of A Death Certificate Do I Need?

If you are in charge of a deceased estate, you might want to ask for more than one certificate of death. The amount you need will depend on the assets the deceased person held.

According to the National Cremation, it's a good idea to get around ten copies of the death certificate.

  • The insurance company might want to see proof of your name and address. It's essential to have this on hand.

  • There are a lot of companies that let you file a claim online, which makes the process faster. Check the insurance company website to see if you can file a claim there.

  • Once you’ve made a claim, the life insurance company will contact that plan’s beneficiaries to start the process of paying the death benefit.

Update Beneficiary Details

If you're the policyholder, double-check that your insurer has the most up-to-date contact and address information for your named beneficiaries.

If a beneficiary cannot be located or reached, the insurer will generally hold onto the funds until they can determine whether the individual is alive or deceased. This may also impact how money is paid to other beneficiaries.

What if You Can’t Find Policy Information?

When you file a claim, make sure you have all the correct paperwork, such as the policyholder’s death certificate or a copy of the policy you are claiming. This will speed up the process of getting paid.

You should at least have a policy number when you claim so that the life insurance company can check their records and verify the details.

Unfortunately, there is no national database of life insurance policies. However, here are some methods you can use to find details of a life insurance policy:

  • Call the insurance provider if you know who the plan was with but don’t have the exact details. The provider will be able to tell you more about the policy. 

  • Contact the deceased’s employer if the plan was through their work. In many cases, all employees will have plans with the same provider.

  • Contact any financial or estate planning advisors the deceased used. They have access to details about life insurance policies. 

  • Manually search through physical documents. Look for business cards, application forms, insurance certificates, or other forms of contact with insurance companies. 

  • Search through electronic documents to find information about their plan. Use the search function on the deceased’s email accounts or personal computers to look for contact from insurance companies. 

  • Check the deceased person’s bank records. Policyholders have to pay a monthly premium which means they may have been making payments to a particular life insurance company. If the policyholder has permanent life insurance, they may have stopped making payments, so you may need to check historical records. 

  • Check the policyholder’s tax returns for evidence of policy payments. 

  • Use the NAIC life insurance policy locator. If your state has signed up, this can help you find lost policies. 

  • Call life insurance companies that are popular in your area. Their representatives might tell you if the deceased had a plan with the company.

  • Use a private insurance search service. These companies will help with your search for a fee. They are a good last resort if you’ve been unsuccessful with all other options.

  • Check your state’s unclaimed property office. The life insurance company will turn the death benefit over to the state if no one claims after a death.

Tell your beneficiaries where they can find life insurance information.

It’s always wise to leave your policies with your legal advisor or to store copies of these documents in a safe location such as:

  • A safe.

  • A lockbox.

  • A file storage facility.

Doing this will ensure your beneficiaries have all the required documentation to make a claim when you die.

Be sure also to keep your insurance company up-to-date with the beneficiary’s contact details. You can also provide your beneficiaries with information about the plan so they are prepared.

Can My Life Insurance Payment be Delayed?

Some life insurance payouts can take months or longer. Factors that can delay the speed at which you receive your life insurance payment include:

●     Not being able to locate a policy: The speed at which you make a claim directly affects how quickly it is paid. If you can’t find a policy and make a claim, you won’t receive your cash.

●     Not locating a beneficiary: If the life insurance company doesn’t have information about a beneficiary, they won’t be able to process the payment to this person. Policyholders can avoid this by updating their plans with the beneficiary’s most current contact details.

●     Suspected fraud: The life insurance company may delay payment if they suspect fraud and need to investigate.

If your life insurance payout is taking longer than anticipated, contact the company to discover the reason for the delay.

What is a Contestability Period?

Most life insurance policies have a contestability period of between one and two years. This means that if the policyholder passes away during this time, the company may delay payment while investigating the reason for the death.

Can a Life Insurance Company Deny My Claim?

In some circumstances, insurance companies can deny a payment request. This can be particularly stressful if beneficiaries need the money urgently and your life insurance provider decides to deny the claim.

This is the last thing that a life insurance policyholder wants and means that you should be aware of all the factors that life insurance companies look at when processing claims.

Life insurance companies will usually deny a claim in the following circumstances:

  1. The policyholder died in an activity not covered by the plan. High-risk activities like skydiving, paragliding, or car racing are often not covered by a life insurance policy or require extra coverage.

  2. Insurance companies won’t cover suicide in some cases if it occurs during the plan’s contestability period. This usually lasts for up to two years after the policyholder takes out the plan.

  3. Undisclosed health issues. Not disclosing a health issue when you take out a plan can result in the life insurance company refusing payment.

  4. Undisclosed alcohol or smoking. Lying about your alcohol or tobacco usage can result in your payment being declined. Life insurance companies take this very seriously and have been known to even look at social media profiles and hire private investigators if they suspect insurance fraud.

  5. The policy lapsed. If the policyholder stops making payments, the policy will expire and beneficiaries won’t receive a death benefit. 

Do You Pay Taxes on a Life Insurance Payout?

One of the biggest benefits of life insurance is that death benefit payments are typically tax-free. Beneficiaries get to keep the entire amount that they receive.

There are some circumstances where you may have to pay interest on the life insurance payout, though:

If you receive the death benefit in installments, you’ll typically pay tax on any interest the amount earns following the policyholder’s death. The initial amount will remain tax-free.

You may also have to pay tax if the death benefit becomes part of the policyholder’s estate and the total amount exceeds the tax exemption limit. 

The federal estate tax exemption for 2022 is $12.06 million, although some states have lower rates.

Where Can I Learn More about Life Insurance?

If you’re interested in learning about life insurance claims, policies, terms, or costs, visit our Life Insurance Hub

We have loads of articles such as guides to term life, permanent life, and final expense insurance to help you find out about life insurance and get a plan that suits your needs.

If you’re interested in speaking to an insurance agent about a provider or a particular type of insurance plan, reach out on 1-888-912-2132 or send an email to