What is the term for the payment of life insurance? Can I receive interest if the payment is late?
Every year there are more than 30,000 families who, thanks to Life Insurance, can economically rebuild their lives, which, according to the latest data from the Insurance Social Report, is based on an average insured capital of 23,920 euros.
But if the amount of coverage is important, so is the insurance charge. There are many who use this amount to pay for urgent expenses and the majority to be able to adapt to a change in family circumstances that almost always means a cut in income, but maintains a good part of the expenses.
A collection process that protects the insured
The collection procedure seeks to be fast and agile. The facilities begin with the payment of taxes, allowing the partial settlement of the Inheritance Tax only for the amount of the insurance and with the added advantage in some products, such as life insurance, which even advance the amount of the Tax to be able to pay it. and request payment.
Liquidated the Tax, you can now request the collection of the amount. As stipulated in article 18 of the Insurance Contract Law: “The insurer is obliged to pay the compensation at the end of the investigations and appraisals necessary to establish the existence of the claim and, where appropriate, the amount of the damages that result from it” to which it adds that: “In any case, the insurer must make, within forty days, from the receipt of the declaration of the loss, the payment of the minimum amount of what the insurer may owe, according to the circumstances known to him. All this, as also stated in article 19: “except in the event that the loss was caused by bad faith of the insured”.
Payment of interest if there is a delay in payment
But what happens if these 40 days elapse and the insurance payment is not received? Article 20 of the Insurance Contract Law stipulates a series of rules that protect the insured in the event of a delay in the payment of compensation.
In the first, it indicates who may claim against the insurance company, in the case of life insurance, it clearly defines it as: “It will affect, in general, the default of the insurer with respect to the policyholder or insured and, in particular, to the delay with respect to the injured third party in civil liability insurance and the beneficiary in Eye med life insurance ”.
After paying the Inheritance Tax and requesting the payment of the insurance, the figure of the beneficiary of the life insurance is more than clear and it will be the only person who can claim from the insurance company the payment of any type of compensation for the delay in payment.
This delay occurs when: “they have not fulfilled their provision within three months from the occurrence of the claim or have not proceeded to pay the minimum amount of what they may owe within forty days from receipt of the declaration of the accident”.
After this period is when the delay in payment can be penalized and would do so in the following way, provided that there is no justifiable cause on the part of the insurance company:
- With the payment of an annual interest equal to the legal interest of the money in force at the time, it is accrued, increased by 50%. Currently, the legal interest is 3%, increased by 50% would require the payment of 4.5% per year, calculated by the days of delay. It is important to highlight a point of this article 20, that it is not necessary to make a “judicial claim” to request the payment of this interest.
- To speed up collection, the regulations also establish a high interest, clearly with a penalizing objective, if two years have elapsed since the request for collection, thus determining that: “after two years have elapsed since the occurrence of the claim, the annual interest may not be less than 20%”
Although payment delays in any sense, without a justified circumstance, are very rare. What is clear is that the insured is protected by a regulation that, if it is not even improved by the insurance contract, establishes a quick collection period and penalizes any delay with high compensation.
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