Iowa Life Insurance Claim Law: Interest After 30 Days, Ten Years on a Written Contract and a Broad Beneficiary Bar

Not legal advice. This page summarizes selected sections of the Iowa Code as published by the Iowa Legislature and one Iowa Supreme Court decision. It does not cover Insurance Division rules, every policy-provision statute, or later case law.

Iowa at a glance

Interest when payment is late: 511.38

The trigger is simple. If, without the beneficiary’s written consent, the company fails or refuses to pay death proceeds within thirty days after receiving satisfactory proof of death, it owes interest on whatever was not paid in that window.

• From when. Interest is computed from the date the proof of death was received, not from day 31.
• Rate. The higher of (a) the company’s effective policy-loan interest rate under 511.36 on the date proof was received, or (b) its effective rate on death proceeds left on deposit.
• Survivorship clauses. If the policy requires the beneficiary to survive the insured for a set period, the thirty days run from the end of that period.
• No lump sum, no interest. The section does not apply when the beneficiary elects to take the proceeds other than as a lump sum.

Watch the consent language. A form that asks the beneficiary to “consent” to a delay may affect interest under this section, so read it before signing.

Incontestability: 508.28

Every Iowa life policy form must provide that the policy is incontestable after it has been in force during the insured’s lifetime for two years from its date, except for nonpayment of premiums. The sentence itself names no other exception: it does not mention fraud, disability benefits or accidental-death riders. How policy exclusions and riders interact with that sentence is a question for an Iowa lawyer.

Unfair claim settlement practices

Iowa Code 507B.4(3)(j) prohibits listed claim practices when committed often enough to indicate a general business practice. Item (6) is notable: alongside failing to try in good faith for prompt, fair settlement where liability is reasonably clear, it names “failing to include interest on the payment of claims when required” by 511.38. Other items include:

• refusing to pay without a reasonable investigation based on all available information (4);
• not affirming or denying coverage within a reasonable time after proof of loss statements are completed (5);
• making payments to insureds or beneficiaries without stating the coverage under which they are paid (10);
• requiring a preliminary claim report and then a formal proof of loss containing substantially the same information (12);
• not promptly providing a reasonable explanation, grounded in the policy and the facts or law, for a denial or compromise offer (14).

The Insurance Division enforces these standards. This page does not address whether an individual can sue under chapter 507B; Dolan, below, described the chapter’s penalties as a deterrent rather than compensation for the person harmed.

Dolan: Iowa’s first-party bad-faith tort

For years the Iowa Supreme Court applied the bad-faith test without deciding whether the tort existed. In Dolan v. Aid Insurance Co., 431 N.W.2d 790 (Iowa 1988), an underinsured-motorist case, it squarely recognized a first-party bad-faith claim. The court:

• explained that contract damages will not always compensate an insured adequately and that chapter 507B penalties give “slight consolation” to the person harmed;
• adopted the standard that a plaintiff must show no reasonable basis for denying benefits and the insurer’s knowledge or reckless disregard of that lack;
• held that a “fairly debatable” claim, on facts or law, may be debated; and
• reversed for the insurer, because the insured’s earlier back injury made the claim fairly debatable and the company had not unreasonably delayed in gathering information.

Dolan involved the insured’s own auto policy. Whether a life insurance beneficiary may bring the tort in a given case is a question for an Iowa lawyer.

How long you have to sue

Iowa Code 614.1 gives ten years for actions “founded on written contracts” (614.1(5)(a)) and five years for unwritten contracts and actions not otherwise covered (614.1(4)). A life policy is usually written, but its own suit-limitation clause and the accrual date both matter, so do not rely on the full decade without advice.

Group coverage

The sections reviewed for this page do not address converting employer group life to an individual policy. For workplace plans governed by federal law, see employer group life.

Beneficiaries who cause the death: 633.535 and 633.536

Section 633.535 has two separate disqualifications for life insurance beneficiaries.

• Intentional killing. A named beneficiary of a life policy who intentionally and unjustifiably causes or procures the insured’s death gets nothing; benefits are paid as though that person died first (633.535(3)).
• Violent felony in the last six months. A named beneficiary convicted of a felony in Iowa Code chapters 707 (homicide and related crimes), 708 (assault), 709 (sexual abuse), 710 (kidnapping and related offenses) or 710A (human trafficking), committed against the insured in the six months before death, is likewise disqualified. The insured may override this with a signed, notarized affidavit saying the beneficiary should still receive the benefit (633.535(4)).
• Proof. Any court of competent jurisdiction may decide the question by a preponderance of the evidence, separate from a criminal case. The civil case cannot go to trial, and the accused need not submit to discovery, until the criminal case is decided at trial or, if no charge is filed, until six months after the death. A conviction for murder or voluntary manslaughter is a conclusive presumption (633.536).

A policy that still names the ex: 598.20A

Iowa has a statute aimed squarely at life insurance. Except where federal law preempts it, a decree of dissolution, annulment or separate maintenance voids an earlier designation of the spouse, or of a relative of the spouse, as beneficiary of a policy the owner holds on the owner’s own life (Iowa Code 598.20A). The designation stands if the decree itself names the ex as beneficiary, if the owner names the ex again after the decree on the insurer’s form, or if the two remarry.

When the designation fails, the money goes to the alternate beneficiary, or to the owner’s estate if there is none. The insurer is liable to the alternate only if it received written notice at its home office at least 10 days before it paid and it did not deposit the proceeds with a court. The section keeps open a claim against someone who was paid by mistake.

Example

A Des Moines beneficiary sends a certified death certificate and claim form that the company receives on April 1. The company asks her to sign a form agreeing to a delay while it reviews the application, and she declines. It pays on June 15. Under 511.38 she is owed interest from April 1 to payment, at the higher of the policy-loan rate or the deposit rate. If the payment came without that interest, she can raise it with the company and the Insurance Division.

Complaints

The Iowa Insurance Division accepts complaints about Iowa-issued policies: File a Complaint (Iowa Insurance Division). A complaint does not extend the time to sue.

Sources

• Iowa Code 2026, Iowa Legislature: legis.iowa.gov.
• Iowa Insurance Division: iid.iowa.gov.
• Dolan v. Aid Insurance Co., 431 N.W.2d 790 (Iowa 1988) (full opinion, CourtListener): courtlistener.com. Read November 3, 2026.
• Iowa Code 598.20A (official PDF, Iowa Legislature): legis.iowa.gov.

Not legal advice. This page summarizes general rules and the specific statutes cited. Your policy's wording, the state whose law applies, and whether the coverage came through an employer can all change the result. See the disclaimer and editorial policy.