How Claims Are Paid Out: Understanding Payment Methods

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Direct Payment to Policyholder: When the insurance company pays the policyholder directly, who is responsible for paying repair or medical bills.
Third-Party Payment: In cases like auto accidents or liability insurance, the insurer might pay a third party (e.g., a repair shop, medical provider, or plaintiff).
Types of Payouts:
- Lump-Sum Payments: Full payment of the claim amount in one go (common with life insurance or disability).
- Installments: Payments made periodically over time (used in health, life, or disability insurance claims).

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