# Term insurance payout options explained

> How nominees get term insurance benefits after death: lump sum or instalments.
- Title: Term insurance payout options explained · mint | Shortify
- Summary: How nominees get term insurance benefits after death: lump sum or instalments. Term insurance nominees can receive death benefits as a lump sum or in…
- Keywords: term insurance, nominee, death benefit, lump sum, instalments, insurance policy, tata aia, news, india, Term, insurance, payout
- Source: mint — https://livemint.com/money/personal-finance/lump-sum-vs-instalments-how-nominees-can-receive-term-insurance-benefits-after-the-insured-persons-death-11792921241205.html
- Author: Eshita Gain
- Published: 2026-10-25T11:33:09+00:00
- Read time: 1 min
- Topics: term insurance, nominee, death benefit, lump sum, instalments, insurance policy, tata aia, news, india
## Term insurance payout options
Term insurance provides financial protection to beneficiaries if the policyholder dies during the policy term.
## Payout modes explained
Nominees may receive death benefits as a lump sum, instalments, or a combination of both depending on the policy terms.
## Section 39 of Insurance Act
Under Section 39 of the Insurance Act, 1938, nominees can be parents, spouses, or children (including minors).
## Staggered payment options
A staggered payout allows beneficiaries to receive death benefits in monthly, annual, or increasing monthly instalments.
## Monthly payout mode
In monthly payout mode, nominees receive equal instalments for a fixed period of months or years.
## Increasing income monthly
In increasing income monthly mode, the percentage of monthly income received increases each month to combat inflation.
## Annual payout option
In annual payout option, nominees receive death benefits in annual instalments.
## Combined payout mode
Most term plans offer 50-60% as lump sum and split the remaining 40-50% in equal instalments.
## Payout mode changes
Payout mode is chosen when buying the policy and usually cannot be changed later.
## Key takeaway

Term insurance nominees can receive death benefits as a lump sum or in monthly/annual instalments, with most plans offering 50-60% as lump sum and 40-50% in instalments.