Call Us (915) 599-2900 ☰ ˟
Logo
El Paso - (915) 599-2900 San Antonio - (830) 360-8660
  • Home
  • Online Quote
    • BusinessImage of right arrow
      • Commercial Quote
      • Workers Compensation Form
    • AutomobileImage of right arrow
      • Instant Auto Quote (Quicker Results)
      • Manual Auto Quote (Better Pricing)
    • HomeownersImage of right arrow
      • Homeowners Quote
    • Life & HealthImage of right arrow
      • Life Insurance Quote
    • BondsImage of right arrow
      • Bond Form
    • Contractors
  • About Us
    • About Us
    • Our Pillars
    • Mt. Franklin Insurance In The News
    • Testimonials
    • Contact Us
    • Careers
    • Important Links
  • Blog
  • In the community
  • Español
    • Cotizaciónes en linea
    • Líneas Comerciales
    • Líneas Personales
    • Seguros de auto
    • Seguros de salud y vida
    • Seguro para propietarios de viviendas
  • Make a Payment
Home > Blog > When Does Life Insurance Payout?
TUESDAY, SEPTEMBER 29, 2020

When Does Life Insurance Payout?

When Does Life Insurance Payout? 

Life insurance is designed to compensate your loved ones in case of your passing, so most policies only payout once the policyholder passes away. The insurer must usually be provided with a proof of death, such as a death certificate. Most life insurance policies provide a lump sump payment for the beneficiaries listed on the policy. 

This is true for both term and whole life insurance policies, although there are some differences between the two.

 

 

Payment for Whole Life vs Term Life Insurance Policies 

At their base, term and whole life insurance policies are different because of the length of time they are meant to cover. Term life insurance policies only cover a certain amount of years as chosen by the policyholder (such as 10, 20 or 30 years) while a whole life insurance policy lasts until it is cancelled or the policyholder dies. There is another difference when it comes to payouts, however. 

With a term life insurance policy, you cannot withdraw money while the policy is active. Benefits from this policy will only be paid if the policyholder dies while the policy is active. If the policy is canceled, or the policyholder dies after the term policy’s limit runs out, compensation will not be paid. 

Whole life insurance policies operate a little differently. Some whole life insurance policies, also known as permanent life insurance policies, allow the policyholder to withdraw small amounts of cash from their policy while it is active. This is called a cash-value withdrawal and is typically not taxed. 

For most policies, the insurer may have 30 days after a claim to investigate and approve the claim. At the end of this period, benefits may be paid to the surviving beneficiaries. 

You should not take money out of your life insurance policy without consideration, however. Withdrawing money can reduce the amount of benefits that can be paid at the end of the policy. As with term life insurance, a whole life insurance that is canceled before the policyholder dies will usually not provide benefits to any beneficiaries listed on the policy. Unless, however, it is a cash-value policy. A cash-value policy may allow you to receive cash value from the money accumulated once you cancel or “surrender” the policy. 

Take careful consideration before withdrawing money or canceling an insurance policy. A lack of coverage can leave your beneficiaries without compensation after your passing.

Call us today at (915) 599-2900 or visit www.MtFranklin.com to see how we can help you.

 

Posted 8:00 AM

Share |


No Comments


Post a Comment
Required
Required (Not Displayed)
Required


All comments are moderated and stripped of HTML.

NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive
  • 2022
  • 2021
  • 2020

  • mt franklin insurance(34)
  • el paso(31)
  • insurance(26)
  • tx(15)
  • commercial insurance(14)
  • business insurance(14)
  • homeowners insurance(11)
  • local insurance(11)
  • home insurance(10)
  • auto insurance(9)
  • homeowners(8)
  • car insurance(8)
  • house(7)
  • house insurance(7)
  • local business insurance(5)
  • home(4)
  • life insurance(4)
  • life and health insurance(4)
  • business(3)
  • driving(3)
  • bop(3)
  • car(3)
  • commercial(3)
  • local commercial insurance(3)
  • auto(3)
  • property insurance(3)
  • business owners policy(3)
  • mtfranklininsurance(2)
  • water damage(2)
  • elpasoinsurance(2)
  • life(2)
  • commercial insurance in el paso(2)
  • local auto insurance(2)
  • bop's(2)
  • health(2)
  • cheapinsurance(2)
  • health insurance(2)
  • local car insurance(2)
  • business & commercial auto(1)
  • fall risks in business(1)
  • homeowner(1)
  • auto insurance premium(1)
  • homebuyers(1)
  • family(1)
  • insured vehicle(1)
  • pets(1)
  • liabilityinsurance(1)
  • rain damage(1)
  • homeowners policy(1)
  • accident(1)

View Mobile Version
Logo

El Paso: (915) 599-2900
San Antonio: (830) 360-8660
Fax: (915) 921-5550
E-mail: Info@MtFranklin.com


icon a drawing of a face a drawing of a face
© Copyright. All rights reserved | Powered by Insurance Website Builder