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Considering the significant inflation that we have, I’m curious if any interest is paid on the policies?
Does an FE policy pay “interest” upon death payout?
- Thread starter wehotex
- Start date
- 24,978
From date of death to check being cut.
Not sure if all companies do.
Not sure if all companies do.
They don’t . I had a $20 k claim with Aflac on 4 month old policy . They paid the claim after 7 months but paid zero interest
What state was that in? Most states have a rule that a clock starts at proof of death and if the death benefit isn't paid in a certain amount of time, they're supposed to pay interest.
- 24,978
Note: That includes contestible claims as well. Which is where it can run a couple of months.
- 18,988
At warp speed. I would guess FE contestable claims average 5-6 months to settle. Many take 10-11 months.
Interest clock starts at time of decision.
That has to be some law in your state. NV is 2 months max after proof of death.
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I think CA is less. Edit: Just Googled it. Up to 85 days. On a non contestable claim I am having an aneurysm at about the end of say 25 day of receipt of the DC and claim form.
I am curious now though. Maybe I can find a claim letter.
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- 18,988
Even on contestable claims?
I've only dealt with claims in Ky, In, Il, Tn, Mo, Mi and Tx. All were the same. Interest paid if the claim wasn't paid in 30 days on non contestable claims.
I just had an almost 2 year old GCU rescinded. They sent the beneficiary the return of premiums. They didn't include any interest. Took then almost 4 months to rescind.
On contestable claims that have been paid they have never paid interest unless it went over 30 days from the time they made a decision. Most paid contestable claims take 4-6 months for a decision. Although I have had KSKJ pay within a month on a contestable claim.
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....and @Tahoe Ray hits the question with the classic question to a question on this forum "What State is this?". I am still amazed by how many agents / brokers that fail to understand the given how many jurisdictions we have in the insurance world that the exact location can change the answer to many many questions.
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