Washington Life Producer Practice Exam

When must a claim on a life insurance policy be paid after proof of loss has been received by the insurer?

1. Immediately

2. Within 30 days

3. Promptly

4. Within 60 days

The correct answer is: Promptly

The requirement for a life insurance claim to be paid “promptly” after proof of loss has been received by the insurer reflects the obligation of insurance companies to act swiftly in processing claims once they have the necessary documentation. This term signifies that the insurer must make reasonable efforts to evaluate the claim and pay it without unnecessary delay, typically within a few weeks, depending on the complexity of the claim and the review process. The term "promptly" does not specify an exact timeframe, which allows for some flexibility based on specific circumstances surrounding the claim, but it can’t be excessive either. Insurers are generally held accountable for acting quickly to ensure that beneficiaries receive the benefits they are entitled to in a timely manner after the necessary proof has been submitted. Other potential timeframes, such as 30 days or 60 days, provide specific limits that could suggest a longer waiting period than what "promptly" entails. While these specific durations might be used in different contexts or other types of insurance policies, in the realm of life insurance and claims, "prompt" is the term that underscores the urgency and expectation of timely action based on the clear need for beneficiaries to receive funds following the loss of a loved one.