Question

From what point must the insurer pay interest on the proceeds of a death claim?

a. From the date of death
b. From the date the claim was filed
c. From the date the death certificate was issued
d. From the date the beneficiary is notified

Answer 1

The insurer is required to pay interest on the proceeds of a death claim from the date the claim is filed. This helps ensure prompt payment and compensates beneficiaries for any delay in receiving the funds due to them after the policyholder dies.

Step-by-step explanation:

The insurer must pay interest on the proceeds of a death claim from the date the claim has been filed. Insurance policies generally contain specific provisions pertaining to the payment of claims and the accrual of any potential interest.

When a policyholder dies, the beneficiary must file a claim to receive the death benefit. The insurer then has an obligation to pay out the life insurance proceeds in a timely manner.

If there is a delay in payment beyond a certain period legally specified or outlined in the policy, the insurer may be required to pay interest from the date the claim was received.

This practice is in place to ensure prompt payment and to compensate beneficiaries for the time their funds are unavailable to them, despite having a valid claim.