When does interest on life insurance proceeds begin to accrue?

When does interest on life insurance proceeds begin to accrue?

• A. Immediately upon death
• B. 10 days after receipt of proof of death
• C. 30 days after receipt of proof of death
• D. 60 days after receipt of proof of death

Answer: (B)

Interest on life insurance proceeds begins to accrue 10 days after the insurer receives proof of death. This timeframe is established to allow the insurance company to verify the claim and process the payment. The accumulation of interest serves as compensation for the beneficiary for the time they have to wait for the funds after the policyholder's death. According to insurance laws and regulations, this interest is typically calculated from the 10th day following the receipt of necessary documentation, ensuring that beneficiaries are not left waiting without some form of remuneration for the delay. This is a standard practice in the industry, which promotes fairness and transparency in the processing of claims, ensuring that beneficiaries are not disadvantaged during the period following the policyholder's passing.

Interest on life insurance proceeds begins to accrue 10 days after the insurer receives proof of death. This timeframe is established to allow the insurance company to verify the claim and process the payment. The accumulation of interest serves as compensation for the beneficiary for the time they have to wait for the funds after the policyholder's death. According to insurance laws and regulations, this interest is typically calculated from the 10th day following the receipt of necessary documentation, ensuring that beneficiaries are not left waiting without some form of remuneration for the delay.

This is a standard practice in the industry, which promotes fairness and transparency in the processing of claims, ensuring that beneficiaries are not disadvantaged during the period following the policyholder's passing.