What Are The Different Death Payout Options Under Life Insurance Policy?
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The insurance payout that the nominee receives as the death benefit is usually pre-determined. The policyholder is aware of the minimum amount their family will receive in their absence. In the case of the maturity benefits, the amount you receive varies based on the type of policy you hold, its terms and conditions, and its returns. It is a variable amount, and you may not until the end of the policy tenure.
Although many people meticulously plan their investment in life insurance policies, not many are aware of the processes involved in raising a claim and getting the insurance payout when the time comes. To understand how to get the insurance payout, let us know how the process works.
Steps to Get the Payout
The first step in getting a life insurance payout is to file a claim request with the insurance company. You can do this in three ways –
- You can file a claim online on the insurance company’s website or through a mobile application
- You can contact the insurer over the phone and file your claim
- You can personally visit the insurer’s office and submit a written request along with the claim form
What Are the Different Insurance Payout Options Available?
Most insurance companies in India offer two types of insurance payout – lump sum payout and periodic payout.
1. Lump sum payout
In lump sum payout, the insurance company pays the death benefit or the maturity benefit to the nominee or the policyholder as a single payment. The lump sum life insurance payout may also include the bonus and loyalty amount (if any). Lump sum payout ensures that the nominee or the policyholder receives a significant amount in one transaction. They can use it either for investment purposes or meet any sizable expenses like debt repayment, home loan prepayment, college fees, etc.
2, Periodic payout
In some cases, insurance companies offer periodic payout. Here, one portion of the life insurance benefits may be paid as a lump sum amount, while the rest may be converted into annuities or instalments, which are paid periodically as per the policy terms and conditions. Periodic payout ensures that you or the nominee gets a steady stream of income that can help manage regular expenses like rent, EMI payments, etc.
Conclusion
If there is no dispute or fault in the insurance claim, the payout process is smooth, and it takes about 30-60 days before you receive the payout. In some cases, you may receive the amount earlier. The key to getting the life insurance payout without any hassles is to be aware of the processes involved and filing the claim correctly.
Also read- Types Of Investment Plans In India
