What is the term for the payment of life insurance? Can I receive interest if the payment is delayed?
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 Social Insurance Report, is based on an average insured capital of 23,920 euros.
But if the amount of coverage is important, so is the insurance premium. Many people 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 involves a cut in income, but keeps a good part of the expenses.
A collection process that protects the insured
The collection procedure seeks to make it fast and agile. The facilities begin with the payment of taxes, allowing the partial settlement of Inheritance Tax only for the amount of the insurance and with the added advantage in some products, such as life insurance of AEGON , which even advance the amount of the Tax to be able to pay it. and request payment.
Liquidated the Tax, you can request the payment of the amount. As stipulated in article 18 of the Insurance Contract Law : “The insurer is obliged to pay the indemnity at the end of the investigations and appraisals necessary to establish the existence of the loss and, where appropriate, the amount of damages that result of the same “to which it adds that:” In any case, the insurer must make, within forty days , from the receipt of the declaration of loss, the payment of the minimum amount of what the insurer may owe, according to the circumstances known to him. ” All this, as also states 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 pass and the insurance payment is not received? Article 20 of the Insurance Contract Law stipulates a series of rules that protect the insured in case of delay in the payment of compensation.
In the first one, it indicates who may claim 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 person and, in particular, , to the delay with respect to the third party injured in the civil liability insurance and the beneficiary in the 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 only this one who can claim from the insurance company the payment of any type of compensation for the delay in the payment .
This delay occurs when: “he has not fulfilled his benefit within three months from the production of the loss or has not proceeded to pay the minimum amount of what may be due within forty days from the receipt of the declaration of the sinister “.
From this period is when you can penalize the delay of payment and would do so as long as there is no justifiable cause by 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, which is not necessary to make “judicial claim” to request the payment of this interest.
- To accelerate the collection, the regulation also establishes a high interest, clearly with a penalizing objective, if two years have elapsed since the request for payment, thus it determines that: “after two years from the production of the claim, the annual interest can not be less than 20% “
Although the delays of payment in any sense, without there being a justified circumstance, are very rare. What is clear is that the insured is protected by a regulation that, if not even improved by the insurance contract, establishes a fast collection period and penalizes with high compensation any delay.