life insurance payoff-time

[ddee2k]

My mother passed away in Feb. She had life insurance on her mortgage. I took all the forms in on Feb. 12th or so since then I have been told we are in the process of reviewing up until recently when they said checks in mail ( about two weeks ago) no check---since filing claim we paid off mortgage and sold house; however the claim should be paid to the estate for what we paid off I would assume..My ? is how long legally do they have to pay this claim off, they continue to drag their feet and as executor of the estate I am at my wits end...I live in Ohio.

 

[ALawyer]

The reality is that "mortgage insurance" usually goes to a named beneficary -- not the mortgage company t5% motrgage --o pay off the mortgage as that may not be what the beneficiaries want. (E.G. Suppose there was a 4.5% mortgage and a spouse wanted to keep it and earn 6% in bonds.)

The proceeds should be coming and I doubt it is a "stall" as MOST companies are very honest and most states require that the insurance companies pay "delayed settlement interest" from date of death, or after 30 days, on the unpaid proceeds, often at very favorable rates to beneficiaries.

If the policy was in force 2 years or more, it is "incontestable" and the compay must pay regardless if the premiums were up to date.

The proceeds may come in the form of a checkbook instead of a check and already earning a nice rate of interest -- this is the system used by most American companies.

You should ask the lawyer how to handle the proceeds in light of what was done and the exact terms of the will.