How are interests on death proceeds initiated according to insurance guidelines?

Interests on death proceeds are initiated at the date of death according to insurance guidelines. This means that once the insured person passes away, the death benefit becomes due to the beneficiary. The insurer typically begins accruing interest on the proceeds from that specific date, ensuring that the beneficiaries receive not only the face amount of the policy but also any added interest that may have accumulated during the settlement process.

This principle is founded on the idea that the beneficiary is entitled to the funds without unnecessary delay. Since the insurance company acknowledges the claim upon the death of the insured, they begin to calculate interest immediately from that date to compensate the beneficiary for the time they have to wait before they actually receive the funds.