When you take out a life insurance policy, you’ll usually be asked to name the people you want the payout to go to, called the beneficiaries. If it’s a joint policy that pays out on first death, the money would be paid to the surviving policyholder.
When you die, your family, or the trustees if the policy is in a trust, can make a claim with the insurer by calling its claims department. They will usually need to supply the insurer with a death certificate.
Once the insurer has accepted a claim if the policy is not written in trust, it then pays the lump sum to the executors or administrators of an estate, who manage the administration of assets in line with the policyholder's will (or the rules of intestacy, if there is no will). The executors will then pay the money to beneficiaries once they have a grant of probate, which is the official permission needed before distributing an estate.
Some insurers will release part of the money early if the family needs it to pay for the funeral.
It’s a good idea to tell your family that you have life insurance. Let them know the name of the provider and the type of policy it is, to help make the admin easier for them when the time comes.