When an insurer delays payment on a life or annuity contract, they have deprived the insured or beneficiaries of the use of the money. To stop unnecessary delays in payment of proceeds, states have enacted laws requiring the payment of interest to those effected by the delays. Below is the Illinois Law:
215 ILCS 5/224 (I)
“Interest shall accrue on the proceeds payable because of the death of the insured, from date of death at the rate of 9% on the total amount payable or the face amount if payments are to be made in installments until the total payment or first installment is paid unless payment is made within fifteen (15) days from the date of receipt by the company of due proof of loss. This provision does not appear in the policy, however, the company shall notify beneficiary at the time of claim of this provision.”
Other States have a similar law.