Life insurance death benefits are normally paid in a lump sum to the beneficiary or beneficiaries of the life insurance policy.

Or, life insurance proceeds may be paid in regular payments over a number of years.

Another option is a combination of both payment options, where the beneficiary receives a lump sum with the remainder made in payments over time.

When the life insurance policy proceeds are not taken all at once, there is interest paid to the beneficiary on the money they have yet to receive. So, the money not yet paid is like an investment that receives interest until it is fully paid out to the beneficiary.