Compare Rates and Save on Life Insurance


The timeline for receiving a life insurance payout varies, with some beneficiaries receiving funds in as little as 14 days and others waiting up to 60 days. Several factors contribute to these differences, including the timing of claim submission, the accuracy of beneficiary information and state-specific regulations. Understanding these variables and how to navigate them can significantly expedite the payout process.

Table of Contents
Key Takeaways

insurance2 icon

Insurers generally take two weeks to two months to pay out life insurance claims.

uninsured icon

Some factors that can delay a claim include incomplete or inaccurate paperwork, cause of death and contestability clause.

clock icon

While there’s usually no deadline to file a claim, filing a claim sooner means receiving the benefit in a shorter amount of time.

Insurance Rates

Compare Life Insurance Rates

Ensure you are getting the best rate for your insurance. Compare quotes from the top insurance companies.


Factors Affecting the Timing of Death Benefit Payouts

Some of the factors that affect the timing of a life insurance death benefit payout are in your control, like submitting accurate paperwork on time. Others are outside your control, like state laws and regulations and the policyholder’s cause of death. These collectively shape how swiftly or slowly the insurance company releases the death benefit. From the moment you file a claim to the verification of beneficiary information, each step has its own requirements and potential delays.

  • wristwatch icon

    Time Taken Before Filing a Claim

    Depending on the policy, there may be a defined period in which you must file a claim, or you may be able to file a claim at any time after the policyholder’s passing. Generally, the sooner you file a claim, the sooner you will receive a payout from the insurer.

  • calendar icon

    Time Taken to Submit Documents

    To file a claim, you need to submit relevant documents, including the policy number, information about the deceased, a death certificate and the original contract. You may also need to provide an obituary or other public notice of death. The sooner you do so, the faster the payout.

  • female icon

    Beneficiary Information Accuracy

    Ensuring that your information, as the beneficiary, is up-to-date can help to expedite the process. The information may include your name, address and other personal information. If any of this information is inaccurate or outdated, it could delay the death benefit payout.

  • death icon

    Insured’s Cause of Death

    How the policyholder died can affect how long it takes to get a life insurance payout. For example, if the cause of death was a homicide, the insurer may need to investigate to ensure that the beneficiary wasn’t responsible or is not under investigation. Another example is if the cause of death was suicide, the insurer may deny the claim.

  • checkList icon

    Contestability Clause

    If the policyholder dies within the first two years of taking out a life insurance policy, the insurance company may contest the claim for death benefits. The insurer is likely to want to look more closely into the policyholder’s medical history to make sure that there weren’t any medical conditions they failed to disclose or that there wasn't a history of risky behavior.

  • loanReview icon

    State Laws

    Some states require that insurance companies cross-reference with the Social Security Administration’s death records. That process helps to prevent beneficiaries from leaving unclaimed benefits on the table.

Life Insurance Payout Options

Beneficiaries can choose how they receive the life insurance payment. Each option comes with its own set of considerations, from immediate financial needs to long-term planning.

Lump Sum

A lump-sum payment means receiving the entire death benefit at once. This option provides immediate financial relief and flexibility. However, it requires prudent financial management to ensure the funds serve their intended purpose over the long term.


Choosing installment payments allows you to receive the death benefit in smaller, regular amounts over a specified period. This option can provide a steady income stream and help you budget the funds more effectively.

Retained Asset Account

The insurance company holds the death benefit in an interest-bearing account. You can withdraw funds as needed, offering a blend of flexibility and the potential for the money to grow over time.

Researching the available payment options can maximize the financial benefit for your unique situation.

Length of Time to Claim a Life Insurance Policy

Generally, there is no set deadline for filing a claim, but it's advisable to do so as soon as possible to initiate the payout process. Some policies may have clauses that specify a time limit, usually in the form of a "reasonable time" after the policyholder's death, which could range from 30 days to a year.

Even if the policy does state a particular time frame, you may be able to make a claim outside of that period if you can justify the delay to the insurer. Some people may take months or years to file a claim, especially if they're unaware they're a beneficiary. But as long as the insured died while the policy was active, the beneficiary will still get the money. That said, extended delays may trigger a more thorough review of the claim, potentially causing further delays or even denials if discrepancies are found.

It's also worth noting that unclaimed life insurance benefits are turned over to the state's unclaimed property division if beneficiaries do not come forward. The time before this happens can vary by state but is usually around three to five years.

Common Reasons for Life Insurance Payout Delays

Various factors can slow down the process. Understanding the common pitfalls can equip you to take proactive steps, ensuring a smoother, more efficient claims process.


Submitting Incorrect Information or Documentation

Filling out claim forms vaguely or incorrectly can cause an avoidable back and forth. Submitting the wrong documents (such as a copy of the death certificate instead of a certified death certificate) can also cause a delay.

To ensure that the claims process goes as smoothly as possible, you should follow all directions from the insurance company to the best of your ability.


Missing Paperwork

A common cause of death benefit payment delay is missing paperwork. You must provide the insurance company with all the required paperwork to begin processing your claim, including the original policy, a certified death certificate and other information about the deceased. You may also need to include a Health Insurance Portability and Accountability Act (HIPAA) authorization.


Death During the Contestability Period

If the policyholder dies during the contestability period, this could delay payout for a few months to a year. The insurance company will need to investigate fraud or potential misrepresentation on the application to ensure the beneficiary is eligible to receive the benefit.

mglogo icon

You should contact the life insurance company as soon as possible to avoid delays. The claims department can provide guidance about meeting requirements, submitting the correct paperwork and ensuring everything is in order so that the claims process goes as smoothly as possible.

Insurance Rates

Compare Life Insurance Rates

Ensure you are getting the best rate for your insurance. Compare quotes from the top insurance companies.


How to File a Life Insurance Claim

Understanding how to file a life insurance claim and preparing in advance can make the process as smooth as possible, ensuring that you receive the financial support you need in a timely manner.


Obtain the Policy Details

The first step in filing a claim is to locate the deceased's life insurance policy. You'll need the policy number and the details of the insurance company. Knowing these specifics will streamline the subsequent steps and help you contact the correct department.


Notify the Insurance Company

Once you have the policy details, the next step is to inform the insurance company about the policyholder's death. You can usually do this by calling the customer service line. Some companies also offer online portals for initial notifications.


Gather Required Documents

After gathering all the necessary documents, submit the claim to the insurance company. You can typically do this by mail, fax or through an online portal. Ensure you fill out all forms accurately and thoroughly to prevent delays.


Await Claim Approval

Once the claim is submitted, the insurance company will review it. This process may involve verifying the cause of death and ensuring you have met all the policy conditions. Keep in touch with the claims department to track the progress of your claim.


Receive the Payout

After the claim is approved, you'll receive the death benefit. The method of payout — whether lump sum, installment or retained asset account — will depend on the options available in the policy or those you've chosen.

mglogo icon

If the insurer denies your life insurance claim, request a written explanation from the insurance company to understand the reasoning behind the denial. Then, consult with a legal advisor experienced in insurance claims. You may need to provide additional documentation or clarify existing information. In some cases, you may also have the option to appeal the decision.

Paying Taxes on Life Insurance Payouts as a Beneficiary

Generally, the Internal Revenue Service (IRS) considers life insurance proceeds as non-taxable income when received as a lump sum due to the death of the insured person. This means that in most cases, you won't have to include the payout in your gross income or report it on your tax return.

However, there are exceptions. If you opt for installment payments instead of a lump sum, the original amount remains tax-free, but any interest earned on those payments is subject to income tax. Another scenario where taxes come into play is if someone transferred the policy to you for money or other valuable considerations; in such cases, part of the payout might be taxable.

Estate taxes are another consideration. While life insurance proceeds are generally not subject to income tax, they do form part of your estate. If the estate's total value exceeds the federal estate tax exemption limit, then federal estate taxes may apply.

State laws can also have an impact. Some states levy their own estate or inheritance taxes, and the regulations can differ significantly.

Tips to Avoid Life Insurance Payout Delays

Below are some actionable tips to help you expedite the life insurance payout process and avoid delays.

Submit Accurate Paperwork

Make sure you fill out all forms and documents accurately. Inaccurate or incomplete information can lead to unnecessary delays. Double-check all entries and consult with the insurance company if you have questions.

Provide All Required Documents

Don't skip any required documents like the death certificate, policy details or any other forms the insurance company may request. Missing paperwork can stall the process.

File the Claim Promptly

The sooner you file the claim, the quicker the payout process can begin. While there's generally no strict deadline for filing a claim, early submission can help avoid potential delays.

Keep Beneficiary Information Updated

Make sure all beneficiary information is current. Outdated or incorrect details can cause delays or even result in the payout going to the wrong individual.

Understand the Policy

Familiarize yourself with the policy's terms and conditions, including any clauses that might affect the timing of the payout. Knowing what to expect can help you prepare accordingly.

Consult a Financial Advisor

If the policy involves other financial elements like annuities or investments, consider consulting a financial advisor to understand how these could affect the timing of your payout.

Although it may be difficult, pursuing your life insurance payout without delay will likely reduce the time you'll need to wait for benefits.

Frequently Asked Questions About Life Insurance Payouts

Below are answers to some frequent inquiries about life insurance payouts. These help clarify the life insurance payout process, but always consult your policy and speak with your insurance provider for the most accurate information.

About Margaret Wack

Margaret Wack headshot

Margaret Wack is a freelance writer who covers insurance, saving, investing, banking, and more. Margaret earned a bachelor's degree in classics, comparative literature, and poetry from Smith College and a master's degree from St. John's College.