Life insurance payouts are typically made in a lump sum to the designated beneficiary upon the death of the insured individual. The beneficiary needs to file a claim with the insurance company and provide the necessary documentation, such as a death certificate and policy details. Once the claim is approved, the insurance company disburses the payout to the beneficiary. In some cases, beneficiaries may have the option to receive the payout in installments rather than a lump sum. It's important for beneficiaries to understand the terms of the policy and the process for filing a claim to ensure a smooth payout experience.