The amount of money paid to the beneficiary after the death of the life insured within the policy term is called death benefits.
Once the insurance company approves the claim filed by the nominee, the death benefits are released immediately. The insurance company releases the payout after processing the claim, confirming the person’s death, confirming the beneficiary's status, and reviewing whether the premium was paid or the policy status.
Lump-Sum Payout: The lump-sum payout option is the popular option that pays the death benefits in one go. The nominee will receive the death benefits in a lump sum equal to the policy sum assured.
Staggered Payout: You can choose to release the staggered payouts at the policy's inception. In the staggered payout mode, the dependent receives a portion of the sum assured as a lump sum while the remaining amount will be accepted in monthly instalments.
Fixed Monthly Payout: The life insured can receive 50%-60% of the amount as a lump sum with this payout option. The remaining amount can be accepted as a lump sum payout.
Increasing Payouts: You can choose to have an increased monthly payout under this option of the death benefit. The total sum assured will be paid in instalments, which gradually increases.
For example, Manav took a savings policy for Rs.7 lakhs. The policy will pay a sum assured of Rs.7 lakhs as a death benefit after the life insured dies within the policy term. After 10 years of premium payment, Manav died. His nominee Varsha will receive the death payout as staggered payments. The amount will help Varsha to meet the monthly expenses.Back