Montana State Life Insurance Practice Exam

When must the death benefit be paid out after proof of death is received?

1. Within 30 days

2. Within 45 days

3. Within 60 days

4. Within 90 days

The correct answer is: Within 60 days

The correct answer indicates that the death benefit must be paid out within 60 days after proof of death is received. This timeframe is established to ensure that beneficiaries receive the benefits in a timely manner, offering financial support at a critical time following the death of the insured. In the context of life insurance policies, the 60-day period allows insurance companies to process the claim efficiently, while also ensuring that they have sufficient time to verify the legitimacy of the claim and any relevant details surrounding the insured's death. This is a standard practice in the industry, reflecting the balance between the insurer's need to conduct due diligence and the beneficiaries' right to receive their entitled benefits without undue delay. Options indicating shorter or longer payment periods do not align with this industry standard, which emphasizes both efficiency and due process in claims handling. This ensures that the beneficiaries are not left in financial uncertainty while waiting for the payout they are entitled to under the terms of the policy.