If you die whilst having an active life insurance policy then your loved ones may be eligible for a pay-out. Someone will need to let the insurer know you have passed away and start the claim process. It is for this reason you should tell your loved ones about your life insurance policy; if nobody knows about the policy then it could potentially go unclaimed. It can be sensible to email your life insurance policy to someone you trust, or print out your policy documents and give them to your family.
Each insurance company has a claims phone number and will have specialist staff who can help arrange the payout. They will need to see evidence of your death and know who is making the claim. If accepted, any payout will be sent to your personal bank account or to the bank account of the Executor of the Will. This can then be accessed by anyone with Probate, the legal right to deal with your property, money and possessions upon your death. A valid Will can help guide those with Probate to distribute the funds as per your wishes. Alternatively, a life insurance payout can avoid the probate process and be sent directly to the bank accounts of anyone you have specified in a valid Trust.