Do insurance companies pay any interest on a claim if there is a delay in payment?

UPDATED: Jun 25, 2012

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Asked June 25, 2012

1 Answer


Unless there are complications with the claim, most life insurance claims are settled within a few weeks of maturing. If there are problems, this can be delayed, but most insurance companies already have procedures in place to handle the interim. In the meantime, the inheritance is safe and it will continue to accrue interest until the claim is settled.

Even when there are complications with the claim, the insurance company will attempt to get the situation resolved as quickly as possible. Despite popular myths that claim insurance companies are trying to avoid settlements, the insurance company is actually more than willing to close out the policy and move forward. Unless there is sufficient reason to deny the claim completely, most insurance companies will work diligently to get the case closed.

While you are waiting on the insurance company to settle the claim, you may be entitled to a partial payment. Contact the insurance company and make them aware of your financial distress, and they will generally send you a check for a fraction of the policy amount. Once the complication has been cleared up, you will receive the full settlement plus any interest the cash value of the policy has earned during the time you have waited. Unless a fixed rate is written into the policy, the cash value of the policy will earn interest at the current market rate. If the policy specifies the interest rate, then the specified amount is the rate you will earn interest at.

Answered June 25, 2012 by Anonymous

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