The use of instant payouts has tripled since 2018, rising from 11 percent of consumers most often receiving payouts instantly to 37 percent in early 2025. Unsurprisingly, among those receiving frequent or high-dollar disbursements — such as insurance or legal settlements — 97 percent now prefer instant delivery.
Yet despite this clear shift in consumer preference, many insurers and legal administrators still rely on outdated payment methods like paper checks and delayed direct deposits. These legacy systems slow down disbursements, increase operational costs, and erode trust at a critical moment in the customer journey. As instant payments become table-stakes across industries, organizations that modernize their payout strategy now will be positioned to lead — not lag — in delivering speed, security, and satisfaction.
Ye olde paper checks
Despite growing digital adoption, paper checks remain a primary payment method for insurance and legal settlements. Their familiarity and perceived trustworthiness keep them in circulation — but they come with considerable downsides.
Checks can be lost, delayed, or stolen. They’re also expensive. Issuing a paper check typically costs between $5 and $8 each, not including the added administrative cost of cancellations and reissuance. In contrast, electronic payments can cost as little as $0.25.
To put it in perspective: In 2023, life insurance payouts alone totaled $321 billion. If just 15 percent of those payouts were issued via paper check, that’s nearly two million checks — and millions in unnecessary operating expense.
Settlements: Lagging behind demand
According to PYMNTS, 33 percent of claimants receive payouts instantly, yet nearly 49 percent aren’t offered the option at all. Adoption also varies by category, with only 14 percent of property/casualty claims, and even fewer health and life insurance claims paid via instant methods.
Yet it’s precisely these types of frequent or high-value payouts that drive the strongest demand for speed. Instant, flexible payments don’t just meet consumer expectations — they build trust, increase satisfaction, and elevate the overall claims experience.
Why cards are the missing piece
Many insurers and legal administrators are in the midst of large-scale digital transformation — yet payout modernization is often left until the end. It’s the last mile of a fully digital experience, and one of the most impactful for customer satisfaction.
Open-loop debit cards offer a smart solution. Funds can be loaded instantly onto virtual or physical cards, then delivered securely via a branded claims portal. These cards are fully funded, usable anywhere, and ideal for recurring or lower-dollar payouts such as installment settlements, reimbursement cycles, or smaller benefits claims.
Lump sum payments may still flow through ACH or direct deposit, but offering card-based options alongside traditional methods provides flexibility, reduces paper volume, and cuts significant cost from the disbursement process.
Modernizing the last mile
For insurance companies and legal firms alike, the business case is clear:- Lower processing costs
- Reduced fraud exposure
- Faster delivery and greater customer trust
- Less staff time spent on administrative resolution
It's time to move beyond checks
If your organization handles recurring or lump-sum payouts, now is the moment to rethink your payout strategy. Instant disbursements via card or digital wallet aren’t just more efficient — they’re expected.
In today’s fast-moving environment, paper checks slow everything down. Digital payouts build trust, boost efficiency, and meet your customers where they already are.
Fast payment isn’t a differentiator anymore — it’s table-stakes.
