A. Here is how it works -
- Upon the death of the policy insured, the policy owner and/or the policy beneficiary notify the life insurance company.
- The company sends their death claim form upon request.
- Mail back the filled out form, along with the certificate of death and newspaper obituary.
- The life insurance company sends out the payment.
The proceeds could be paid out in a lump sum, or in regular payments over a set period of time. If paid out in several payments, interest is added to compensate for the insurance company being able to hang onto the proceeds of the policy longer.