Does an FE policy pay “interest” upon death payout?

[Tahoe Ray]

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I just had an almost 2 year old GCU rescinded.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.

Probably getting too deep in the weeds here but every state has different wording. For instance, NY is date of death. That being said, I can 100% see a carrier not doing that and it never being questioned.

I looked up KY and their wording is different. The statute says proof of claim but then adds "in the substance and form required by the terms of the policy" which I'm guessing gives them some wiggle room with contestible claims.

I've never seen a recision be credited interest although I've only had a few of those.

 

[WinoBlues]

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.

Very few of mine take that long. Unless the claimant drags their feet. If it is due to an APS I am blowing up the medical records phone.

I don't differentiate between face amounts. Maybe FE may just be worse for some reason.

Considering the significant inflation that we have, I’m curious if any interest is paid on the policies?

OK, I called one of my long term companies.

She said:

State specific

Interest starts from notification

regardless if contestable or non

I asked if there was a time limit if claimant was uncooperative - after 60 days the claim goes to the state.

So the answer is = depends

 

[jdeasy]

Very few of mine take that long. Unless the claimant drags their feet. If it is due to an APS I am blowing up the medical records phone.

I don't differentiate between face amounts. Maybe FE may just be worse for some reason.



OK, I called one of my long term companies.

She said:

State specific

Interest starts from notification

regardless if contestable or non

I asked if there was a time limit if claimant was uncooperative - after 60 days the claim goes to the state.

So the answer is = depends

Yes, FE is different.

Maybe not the processing paperwork being much different but doing most of the underwriting at death is certainly going to slow things.

 

[PrivClientSG]

From date of death to check being cut.
Not sure if all companies do.

My experience on "life" policies in general -- and also has to do with State law.

 

[PrivClientSG]

FE may be different, very different in fact -- but they are still life insurance policies and fall under the jurisdiction, governance, and authority of the respective DOI and State laws. It's not what the insurance company "wants" or "prefers" -- and while one may try, and it's intentional, which I think is unlikely, whether a mistake, oversight, etc., or not -- in the end the risk can be massive.

I will not mention names, but I do remember one company getting "hit" for tens of millions because of a "miscalculation" of interest paid on certain settlement options/death claims.

 

[rousemark]

Considering the significant inflation that we have, I’m curious if any interest is paid on the policies?

The state of TN requires companies to pay interest begining on the 15th day following the receipt of a death claim.
https://r.search.yahoo.com/_ylt=Awr...6-7-315//RK=2/RS=E33NDSv1CDqUL5q0zqYKUnCG50Q-

 

[FEX Quotes]

When my wife passed earlier this year, I waited some time before making the life insurance claims. Every company, including FE and FU paid the claim with interest from date submission. Interest rates were all between 7% - 8%. Several lessons learned about life insurance and estate planning that not even 40 years in the field taught me this past year.

 

[DonP]

When my wife passed earlier this year, I waited some time before making the life insurance claims. Every company, including FE and FU paid the claim with interest from date submission. Interest rates were all between 7% - 8%. Several lessons learned about life insurance and estate planning that not even 40 years in the field taught me this past year.

Sorry to hear about your wife . I’ve had fex quotes over 10 yrs . Your hardly even updating the rates the last 1to 2 yrs .For instance you haven’t even put Sbli quotes in and they’ve been out 6 months . Your American memorial/ Trustage quotes are wrong . Are you going to start updating quotes are is fex quotes just going to dwindle away ?

 

[rousemark]

Sorry to hear about your wife . I’ve had fex quotes over 10 yrs . Your hardly even updating the rates the last 1to 2 yrs .For instance you haven’t even put Sbli quotes in and they’ve been out 6 months . Your American memorial/ Trustage quotes are wrong . Are you going to start updating quotes are is fex quotes just going to dwindle away ?

Have you sent him the ra
Tes
On SBLI and Trustage? I sent him rates on Mountain Life and SNL and they were posted within 24 hours.

 

[goillini52]

When my wife passed earlier this year, I waited some time before making the life insurance claims. Every company, including FE and FU paid the claim with interest from date submission. Interest rates were all between 7% - 8%. Several lessons learned about life insurance and estate planning that not even 40 years in the field taught me this past year.

Sorry for your loss Adam.