Should you file for an insurance claim, the insurance company wouldn’t give you what is due in cold, hard cash; not even as direct deposit to the bank of your choice. Insurance providers typically present claimants with different options as to what form the payout can be.
Under this scheme, you as the beneficiary will be the one who controls the amount and the period on which to receive the claim. You can choose if you want the payment to be distributed quarterly or annually, for example. If your policy’s benefit is $200,000, you may schedule to receive an annual stipend of $10,000 for twenty years. You can also elect a secondary beneficiary should there be any untoward incident such as your death before the end of the timetable.
For this option, you as the beneficiary can choose to receive the interest on the amount of the policy, with the principal left untouched. In addition, you are allowed to withdraw from the principal amount or choose another payout option at a later date.
The insurance provider may settle for partial payment if stipulated conditions are met, even if the policy hasn’t matured. For example, the company may opt to pay for repairs in full if you secured the services of a qualified contractor connected with the firm. For life insurance policies, you can either get a lifetime income or a guaranteed, fixed amount every month that ceases upon death, and no options for beneficiaries; or a period life income where a portion of the payout is distributed for a certain period of time based on agreement.
For this payout, you receive all that you are entitled under the coverage in one payment after insurance maturity. You can also arrange for advanced payment from the insurance policy if you need funds immediately.
Knowing these choices and taking into consideration your financial needs, you can maximize the benefits you will get from your insurance policies.
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