Life insurance payouts and how to claim

When a valid claim is made during the policy term, your insurer pays money to the people who are legally entitled to get it. Who gets the money depends on how the policy is set up. ^{Footnote [1]} If the policy is in a trust, like an Aviva Discretionary Gift Trust or Survivor Trust, the trustees receive the money and pass it to your named representatives. ^{Footnote [2]  Footnote [3]} Check out our article to explore more about putting your life insurance in trust.

If the policy isn’t in a trust, the payout usually goes to your estate (everything you owned). ^{Footnote [1]} If this happens, the executor or administrator may need probate (the legal right to deal with the estate) before they can pass the money on. ^{Footnote [4] Footnote [5]} In a case where there’s no will, the law decides who inherits (based on the rules of intestacy) and a close relative applies to take charge of the estate to share everything out in the legal order. ^{Footnote [6]}   

It’s also worth noting that life insurance money can count as part of your estate for Inheritance Tax, unless the policy is arranged in an appropriate trust. ^{Footnote [1]} Trusts have their own tax rules, so the right setup can help make sure the money reaches the people you choose. ^{Footnote [2]} And since tax can be complex, personal advice may be a good idea.

Every insurer’s process and definitions can differ a little. For the smoothest experience, check your policy documents and follow the claim steps shown there (you’ll often see separate guidance for life insurance claims). 

Life insurance is designed to pay out a cash lump sum if a covered event happens during the policy term. This could be if the insured person dies, or if they’re diagnosed with a terminal illness that meets the policy definition (usually an illness expected to lead to death within 12 months).

It’s important to understand that life insurance is not a savings or investment product – it only pays out if a valid claim is made. The policy pays out once. For joint policies, it still pays a single amount in total. After a claim is paid, the policy ends. To keep your cover in place, premiums must be kept up to date. If payments stop, cover may end and a claim may not be paid.

When a claim is made, the insurer will carry out checks. This may include asking for documents or medical information to confirm the claim and ensure payment is made to the correct person

Here are simple steps to follow once someone dies: 

1. Register the death and get a few official certificates.
2. Find the will and note any funeral wishes. You’ll also need to confirm who the executor is (you’ll need the original will for probate later).
3. Check bereavement support before you commit to funeral costs. If you’re eligible, this could include the Funeral Expenses Payment and the Bereavement Support Payment to help you pay for funeral costs. And if you’re worried about funeral costs, check out our article on what happens if you can’t afford a funeral. 
4. Use Tell Us Once,  which is a service that lets you report a death to most government organisations in one go, after you’ve registered the death. ^{Footnote [7]}  
5. Arrange the funeral (with any support confirmed). Check out our article on how much a funeral costs, if you’re exploring what a funeral budget could involve. 
6. Value the estate, and check Inheritance Tax, by working out what the person owned and whether any tax is due.

For more details, check out GOV.UK’s detailed guide.  

The process of claiming will largely depend on who you are insured with. However, in broad brushstrokes, the process generally means: 

1. Find the policy details. Gather the policy number, the insurer’s name and your contact details. If there’s a will, note who the executor is and where the original will is kept (you’ll need the original if probate is needed).
2. Register the death and order a few official death certificates. If the coroner is involved, you can use an interim death certificate to move things forward.
3. Tell the insurer and start the claim. Most families contact the insurer as soon as they have the certificate, so the claim form and next steps can be set up. 
4. Send the documents the insurer asks for. This usually includes the death certificate (or coroner’s interim certificate), proof of your identity and the claim form. Keep copies of what you send.
5. Confirm who should be paid. If the policy is in a trust, the people in charge of the trust (the trustees) get the money and pass it to the people named to receive it. If the money goes into the estate, the executor or administrator may need probate (legal permission) before it can be paid out.
6. If probate is needed, apply online or by post. Use form PA1P if there’s a will, or PA1A if not. 
7. Keep everything organised. File letters, emails and receipts together. This will help when you later value the estate, pay any debts or taxes and pass on what’s left to the right people.

There isn’t a single set time. A payout can be made once the insurer has the right documents and it’s clear who should receive the money. Here’s what usually affects the timing:

What could help speed it up 

• Having an official death certificate ready when you make the claim. Ordering a few copies helps. If a coroner is involved, an interim death certificate can often be used to move admin forward.
• Knowing who gets the money. If the policy is in a trust, the trustees pass the money to the named representatives, which keeps things clear. 

What could add time 

• When the payout goes to the estate, the executor or administrator may need probate (the legal right to deal with the estate) before money can be passed on. Applying for probate is done online or by post and takes time to process. 
• If there’s no will, the law (intestacy rules) decides who inherits, which can make estate work take longer. 
• Delays getting key papers (for example, medical or coroner information).

Every family’s situation is different, but having the right documents, knowing who should be paid, and starting any probate early can make the payout smoother and quicker.