Do Life Insurance Companies have to Pay Interest on Death Benefits in Minnesota?

/ Santi Cerny, PLLC/

Yes, under Minnesota Statutes 61A.011 life insurance companies must pay interest on death benefits.

What rate of interest are life insurance companies required to pay?

The “insurer shall pay interest at a rate not less than the then current rate of interest on death proceeds left on deposit with the insurer, computed from the insured's death until the date of payment... If the insurer has no established current rate of interest for death proceeds left on deposit with the insurer, then the rate of interest to be paid under this subdivision shall be the rate of interest charged by the insurer to policyholders for loans under the insurer's policies.  Minn. Stat. §61A.011 Subd. 1.

Enhanced Interest Payment:  “if an insurer admitted to transact life insurance in [Minnesota] does not pay within 60 days after receipt of due proof of death of the insured, the proceeds or payments under any policy of life insurance, individual or group, such insurer shall pay interest at an annual rate that is two percent more than the rate of interest provided for in subdivision 1. Such interest shall be computed from the date of the insured's death until the date of payment, on any such proceeds or payments payable to a beneficiary residing in this state, or to a beneficiary under a policy issued in this state or to a beneficiary under a policy insuring a person resident in this state at the time of death. Stat. §61A.011 Subd. 2 [emphasis added]. 

Which life insurance companies does this rule apply to?

Any insurer admitted to transact life insurance in Minnesota must pay post-mortem interest.

What type if life insurance policies must pay post-mortem interest in Minnesota?

Individual and group policies.

Minnesota life insurance attorney Mark Santi holds life insurance companies accountable for failing to pay the correct interest due on death benefits.

 

Contact Minnesota life insurance lawyer Mark Santi if you are experiencing difficulties obtaining life insurance proceeds.