Maryland Life and Health Insurance License Practice Exam

How quickly must a life insurance claim be paid after proof of loss is submitted?

1. Within 30 days

2. Promptly

3. Within 60 days

4. Immediately

The correct answer is: Promptly

The requirement for a life insurance claim to be paid after proof of loss is submitted is generally stated as "promptly." This means that insurers are obligated to process claims in a timely manner and cannot unnecessarily delay payment once they have received sufficient information to make a decision. The term "promptly" emphasizes the importance of efficiency in claims processing, ensuring that beneficiaries receive the benefits they are entitled to without unreasonable delays. The other choices, while they suggest certain timeframes, do not encompass the broader obligation insurers have to act in a swift manner without specific limits. For instance, "within 30 days" or "within 60 days" might imply a more rigid timeline, which could lead to confusion if circumstances surrounding the claim delay the process. The requirement for immediate payment is unrealistic because claims may require thorough investigation or additional documentation before a payout can be made. Therefore, the correct emphasis is on "promptly," reflecting the insurer's duty to act timely based on the specific situation of each claim.