(a) There shall be a provision that when a life insurance policy shall become a claim by the death of the insured, settlement shall be made upon receipt of due proof of death and, at the insurer’s option, surrender of the policy and proof of the interest of the claimant. If an insurer shall specify a particular period prior to the expiration of which settlement shall be made, such period shall not exceed two months from the receipt of such proofs.
Terms Used In Alabama Code 27-15-13
Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
(b) Notwithstanding any other provision of law regarding payment of interest on contracts, if an insurer fails to pay the proceeds of or make payment under a policy pursuant to a death claim within 30 days after receipt of satisfactory proof of death and of the interest of the claimant, and if the beneficiary of the policy elects to receive a lump-sum payment through a retained asset account or otherwise, the insurer shall pay interest on any money due and unpaid after the expiration of the 30-day period. The insurer shall compute the interest from the date of receipt of due proof of the death of the insured and interest of the claimant until the date of payment. The rate of interest shall be the current rate of interest on death proceeds left on deposit with the insurer.(c) Nothing in this section shall be construed to apply to annuity contracts.
