When Is Life Insurance Paid Out? 
Life insurance is paid out upon death and you will have to provide a death certificate from the coroners office . There are options on how to receive the death benefit whether it 's lump sum or paid out over a period of time . It 's best to have this setup in advance so your family will be taken care of . Obviously a death of a loved one is trying during a period of time and this could all be taken care of prior to death . As the insured or owner , a policy can be surrendered thereofre terminating the policy if there is any cash value in the policy . You may also take out a loan on the policy if there is cash value . 