5 Life Insurance Companies That Pay Out

In this article, we cover a detailed list of the best life insurance companies that pay out, based on what consumers and customers are saying.

Life insurance is undoubtedly one of the best decisions to make as it is a way to support your financial plan and guide your family’s future.

Life insurance covers your financial obligations like mortgage, tuition, and cost of living as well as your funeral arrangements. Choosing a life insurance company will depend on your budget, financial goals, and sound policies of the company.

It is advisable to seek the insurance coverage of a company with sound customer service, financial stability, and great policies and features tailored to your need.

It might be a bit tasking to choose a suitable life insurance company that pays out from the many existing ones but not to worry, this post will save you. Read further as we look at the best of the best life insurance companies that pay out.

What is Life Insurance Payout?

A life insurance pay-out is the amount of money that is paid out to the beneficiaries when the policyholder dies while being covered by the insurance policy.

After you die, how your death benefit will be paid is determined by the Life insurance payout options. The types of life insurance payout include installments and annuities, lump-sum payments or a retained asset account.

The type of payout beneficiaries receive depends on the life insurance policy that was tailored for the policyholder.

Best Life Insurance Companies That Pay Out

Here is a list of the top life insurance companies that pay out. You can make your choice and get started with anyone that resonates with you.

1. Nationwide Insurance

Nationwide is a guaranteed life insurance company known for an A+ financial stability. It has existed in service for close to a century and has been the choice of individuals and families over the years.

They offer a wide range of life insurance services ranging from whole life, variable UL (VUL), universal life (UL), indexed UL (IUL), and final expense policies.

Nearly all these policies can be accessed without medical exam and its application can receive approval the same day. Nationwide allows their policyholders the luxury of receiving part of their death benefits while alive but on the condition of critical, or terminal health challenges.

You should note that if you need a burial insurance policy or final expense, Nationwide can help you get that. They are one of the best companies that pay out. you should consider getting started with them.

2. State Farm Insurance

State Farm is an outstanding insurance company and the best when it comes to customer satisfaction and reliability. This insurance company is known to offer relaxing policies, pricing, and amazing customer interactions.

It has an excellent record for financial stability and for a company of its size, it has received rather low complaint rate from clients. State farm provides term, universal and whole life insurance services.

For more information, visit their website

3. Protective Insurance

Protective insurance is one of the best life companies that pays out. It was founded in 1907 and has been offering excellent life insurance policies to its clients.

This company is known for its cheap services which is uncommon in the industry. It specializes in term insurance coverage for close to 40 years and allows credit card payments. Protect your family’s future with protective.

4. New York Life

Formed in 1845, New York Life has stood its grounds as the oldest insurance company with an A++ ratings. It has had a high reputation and great customer service since its existence in business.

If you are hoping to protect your family, then you should get life coverage from New York life insurance. They specialize in Whole Life, Insurance, Term Life Insurance, Variable Universal Life Insurance, and Universal Life Insurance.

They also offer a diverse mix of riders as well an opportunity for plan customization. These include disability income rider and a Spouse’s Paid-Up Purchase Option (SPPO).

New York is one of the top insurance companies that pay out.

5. Mutual of Omaha

Mutual of Omaha is one of our best picks for life insurance companies that pay out. Apart from this, Mutual of Omaha has earned its place as the best life insurance company for living benefits.

Excluding any upfront cost, it provides three accelerated benefits riders on their Term Life Express and IUL Express policies on the condition of chronic, critical, and terminal illnesses.

The Accelerated benefit riders adds an advantage to its clients by letting you get the death benefit early on the grounds of a qualifying illness. This benefit can be used to purchase your needs at this time but note that the benefit your beneficiaries receive will be reduced.

You should also know that Mutual of Omaha also is known to provide accidental death insurance. This policy will pay out your loved ones close to $1,000,000 if your death was caused by an accident.

Mutual of Omaha also gives a disability income rider, which isn’t common in the industry. Visit their website for more information and how to get started.

How Life Insurance Payout works

The death of a life insurance policyholder brings about rounds of events leading to the payout of the death benefit. It is always given to the primary beneficiary. If you are, you will need to set your wheels in motion.

Filing a claim

Reporting the death of the policyholder to the insuring company and filing a claim is the first step to take. You could give yourself some time to grieve since there is usually no time frame to claim the benefits, until when you are ready.

The insurance company will require a copy of the life insurance policy, and a certified death certificate for the departed. In most cases, the insuring company may demand some supporting documents, and this is likely to happen when the policy is quite new, and / or an unclear cause of death.

When Are Life Insurance Benefits Paid?

This doesn’t take a long time, probably between 30 to 60 days after a claim has been filed. This works when there are not delays.

In most states, the insurance companies are allowed 30 days to review the filed claim before payout is made, denial of the claim or requesting for some information before a decision is taken.

Insurance companies are driven to make payouts immediately a claim and proof of death is received because delay can cause high interest payments to the beneficiary.

Reasons for Payout Delays

Situations that may delay payout includes the following:

1. Review of Claim

Payout may be delayed if any circumstance arises during claim review.

2. Suspected Fraud

If there is any reason to suspect a fraudulent act, the insurance company may commence an investigation. If the fact show fraud, then the payout may not be made to the beneficiary.

3. Contestability Clauses

The contestability period is a one or two-year period after the policy inception. The payout may be delayed if the policyholder died as a result of suicide, murder or any excluded cause of death, such as an already existing condition the policy doesn’t cover or, omission of an important information during policy application.

4. Homicide

If the reason for the death of the policyholder was homicide, the insurance company will delay payout until the beneficiary is cleared as a suspect.

If the beneficiary is charged for any crime, the payout may also be delayed until the charges are dropped.

Types of Insurance Payouts

Below are the three types of insurance payouts:

1. Lump-Sum Payments
2. Installments and Annuities
3. Retained Asset Account

1. Lump sum payments

This when the entire payout is made all at once. This payout option is simple, and we recommend it and you could make good use of the money immediately it is received.

2. Installments and Annuities

Just as a payment made in installment, this payout option works like that. A certain amount of money is paid to the beneficiary by the life insurance company on a regular basis (always monthly, quarterly or yearly).

The completion of the payout amount is done over a certain period of time. Note that here, the insurance company gets to decide the duration of the payment.

Annuities is a financial instrument type that pays a set income over a particular period of time. A beneficiary can decide to take all the payout amount (lump-sum payment) and buy an annuity.

This offers the beneficiary an income stream to for the term of the annuity.

3. Retained Asset Account

The Payout amount is kept in the retained asset account (a type of checking account managed by the insurance company)

The beneficiary receives the money by writing checks on the account anytime the money is needed. There are no limits or penalties oto the amount of money the beneficiary withdraws from the account.