Maryland Life and Health Insurance License Practice Exam

Interest on death benefits must be paid by the insurance company if the proceeds are paid beyond how many days after the death of the insured?

1. 15 days

2. 30 days

3. 60 days

4. 90 days

The correct answer is: 30 days

In Maryland, insurance companies are required to pay interest on death benefits if the proceeds are not paid within 30 days following the death of the insured. This regulation is put in place to ensure that beneficiaries are compensated fairly for the time they wait to receive the benefits owed to them. When an insured individual passes away, the insurance company must process the claim and distribute the death benefit promptly. If the company fails to do so within the specified 30-day period, it becomes liable for interest on the payment. This requirement serves to protect consumers by ensuring that they do not experience undue financial hardship due to delays in receiving funds that are rightfully owed to them. Understanding this timeline is vital for both policyholders and beneficiaries to ensure they know their rights concerning the timely payment of benefits and any interest that may accrue.