Life insurance payouts are not taxable. It is usually paid out in one lump sum.
The process can take as little as a month or two if the insurance company is promptly notified, provided with death certificate, there is no question as to the cause of death, and the beneficiaries are clear and there is no dispute over who the beneficiaries are (you have designated your beneficiaries, haven't you?).
Interest is earned on the money from the date of death until the payout occurs, that interest is taxable, but the basic payout is not.
Some insurance companies will send a check, while others will create a money market account and send a checkbook (because of course they want to hold on to the money as long as possible). However, as soon as the checkbook is received, a check can be written for the full amount.
Not only are the payouts tax free, but they are by law confidential -- the insurance company will not talk with anyone except the beneficiary, and they don't report the payout to anyone (except for any interest, as mentioned above, which will be reported to the IRS). This can make it difficult for anyone to even find out that there is a policy, because the insurance company will generally not answer any questions about it. So be sure that your beneficiaries know that there is a policy, and what company it is with, so that they can contact the insurance company.
The procedure usually is that the insurance company sends a claim form to the beneficiary. The beneficiary fills it out and sends it back with an original (not a copy), long-form Death Certificate from the state showing the cause of death. The insurance company verifies everything, then issues a check (or checkbook, as mentioned above). For this to get started, the insurance company needs to know that a death occurred, and the current correct addresses of the beneficiaries.