What is the interest rate for unpaid premiums after 30 days for an annuity?

In the context of annuities, the interest rate for unpaid premiums after a specific period, such as 30 days, is typically set to provide a standard for how long unpaid amounts will accrue interest. The correct answer, 6% per year, is often established as a common statutory interest rate in many jurisdictions, including Montana.

This rate serves to compensate the insurance company for the time value of money lost while waiting for the premiums to be paid. Additionally, it aligns with general industry practices.

Other rates listed may not reflect the commonly accepted statutory guidelines for unpaid premiums, as they are generally lower or higher than what is the standard expectation. Adopting a rate that is too low may not adequately incentivize timely payments, while a rate that is too high could be deemed unfair to policyholders. Consequently, the 6% rate strikes a balance between these considerations, making it the appropriate choice in this context.