How To Choose An Insurance Pay Out Option

Insurance companies pay out millions in insurance claims every single year. If you have aqn insurance claim and are filling in the claim forms, you may come across a section that deals specifically with pay out options. How do you know which pay out option to choose and how do you determine which insurance pay out option is best suited to your needs?

There are a number of very important aspects related to the issue of insurance pay outs. The main aspects that you need to consider is evaluating pay out choices that are presented to you, choosing the best pay out option and also what to do after you have been paid out by you insurance carrier, what to do with the funds.

Very generally speaking the most common pay out options begin with the lump sum option first. Lump sum basically means that your insurance carrier will make one single payment to you, basically all at once. Second options usually include advance payment options; these are basically an advance and not the entire amount at once. This is most often the case when you need a certain portion up front, for example, if your house has been extensively damaged for whatever reason and you need to find alternative accommodation quickly.

Conditional payments are payments that are contingent on certain criteria or conditions being met by you as stipulated by the insurance company. A good example is an insurance company insisting on qualified contractors undertaking the repairs on insured property.

There are also a number of different payment options related to life insurance policies. One of the main options in these cases is the life income payment option. What this basically entails is the insurance company undertake to make a monthly payment to you for the rest of your life. These monthly payments are calculated according to your age and gender. It is important to note that this option then ceases to exist when you die. A modification of this is a fixed period pay out, usually twenty or thirty years.

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