What can a designated person do upon payment under a life or disability insurance policy?

When a designated person receives payment under a life or disability insurance policy, they can provide a full acquittance and discharge the insurer. This means that by accepting the payment, the designated person acknowledges that the insurer has fulfilled its obligations under the policy for that particular claim. By providing a full acquittance, they essentially agree that the payment has settled the claim and that no further claims will be pursued related to that specific incident. This is a common practice in insurance settlements, as it protects the insurer from further liabilities regarding that claim and ensures finality in the transaction.

The ability to discharge the insurer is a critical aspect of the claims process as it helps to prevent the possibility of multiple claims for the same event and assures that all parties clearly understand the terms under which the payment has been agreed upon.