Not legal advice. We paraphrased these Pennsylvania statutes from the General Assembly's official site, the regulations from the official Pennsylvania Code site, and the court decision from its full published text, on November 2, 2026.
What is different in Pennsylvania
Much of Pennsylvania’s life insurance law still sits in the Insurance Company Law of 1921, an unconsolidated statute cited by section number (and by “40 P.S.” in many court opinions). Three features matter most to beneficiaries: an interest rule tied to the date of death, a regulatory claims code with working-day deadlines, and a bad faith statute, 42 Pa.C.S. § 8371, that the General Assembly passed in 1990 after the Pennsylvania Supreme Court declined to recognize a common-law bad faith claim.
Contest period, grace period and the time to sue
Section 410 of the Insurance Company Law lists provisions that individual life policies delivered in Pennsylvania must contain in substance (industrial policies with monthly or more frequent premiums are excluded):
- Contest period. The policy must be incontestable, except for nonpayment of premium, once two years have passed from the issue date with the policy in force and the insured alive. Disability and accidental-death benefits may be excepted (§ 410(c)). The section adds that an incontestability clause blocks only a challenge to the policy’s validity; it does not stop the insurer from relying, at any time, on provisions that exclude or restrict coverage.
- Grace period. Premiums after the first year get 30 days, or one month, of grace, during which the policy stays in force. The insurer may charge interest of no more than 8% a year for the days of grace used, and may deduct the unpaid premium from the death benefit if the insured dies during the grace period (§ 410(b)).
- Entire contract. If the insurer wants the application to be part of the contract, a copy must be endorsed on or attached to the policy when issued (§ 410(d)).
- Reinstatement. The owner may apply to reinstate within three years after default, with evidence of insurability and overdue premiums (§ 410(k)).
- Settlement on proof. The policy must provide that, on the insured’s death, settlement will be made on receipt of due proof of death (§ 410(l)).
Section 411 bars a policy term that limits the time to bring a lawsuit to less than two years after the cause of action accrues (§ 411(b)).
When the medical examiner passed the applicant
Section 411A is an unusual Pennsylvania rule. If the insurer’s medical examiner, or the agent who recorded the applicant’s answers when an exam was waived, issued a certificate of health or reported the applicant fit for insurance, the insurer is estopped from defending a claim on the ground that the insured was not in the required state of health at the time of the exam or the recording of answers, unless that result was procured by fraud, deceit or misrepresentation by or on behalf of the insured.
Interest on late death benefits
Section 411B, added in 2000, applies to all life insurance policies except variable policies, and expressly reaches group life despite the Group Life Insurance Policy Law:
- If death benefits are not paid within 30 days after satisfactory proof of death is submitted, they bear interest at the rate the insurer pays on death benefits left on deposit under a settlement option in the policy.
- Interest runs from the date of death to the date of payment.
- If satisfactory proof of death is submitted more than 180 days after the death, and payment is still not made within 30 days, interest instead runs from the date the proof was submitted.
The rate is set by reference to the insurer’s own deposit rate, so it can be low. Ask the insurer in writing what rate it used.
Claim-handling deadlines
The Unfair Insurance Practices Act lists unfair claim settlement practices that are violations when done “with such frequency as to indicate a business practice,” including misrepresenting policy provisions, refusing payment without first investigating reasonably, leaving coverage unconfirmed or undenied for an unreasonable time after proof of loss, and failing to promptly give a reasonable explanation for a denial (§ 5(a)(10)). The Insurance Department’s regulations turn those into specific deadlines:
- Acknowledge within 10 working days of notice of a claim, unless payment is made in that time. Telling the insurer’s agent counts as telling the insurer (31 Pa. Code § 146.5(a)).
- Send forms within 10 working days. Supplying the claim forms, instructions and reasonable help within 10 working days also counts as acknowledgment (§ 146.5(d)), and other communications that reasonably call for a reply must be answered within 10 working days (§ 146.5(c)).
- Investigate within 30 days of notice, unless that cannot reasonably be done. If it cannot, the insurer must send a written explanation at 30 days and every 45 days after, saying when a decision may be expected (§ 146.6).
- Accept or deny within 15 working days after receiving properly executed proofs of loss. A denial must be in writing and must refer to the policy provision, condition or exclusion relied on (§ 146.7(a)(1)).
- More time. An insurer that needs more time must say why within those 15 working days, then send letters 30 days later and every 45 days after (§ 146.7(c)(1)).
How these rules matter in court is unsettled. Some Superior Court decisions allow a plaintiff to point to violations of the Unfair Insurance Practices Act or these regulations as evidence of bad faith. Federal courts in Pennsylvania generally do not treat a violation as bad faith in itself; in Oehlmann v. Metropolitan Life Insurance Co., 644 F. Supp. 2d 521 (M.D. Pa. Dec. 21, 2007), a life insurance case, the court said the Insurance Commissioner enforces those rules and applied only the ordinary bad faith test.
Bad faith: Section 8371 and Rancosky
Section 8371 says that in an action arising under an insurance policy, if the court finds the insurer acted in bad faith toward the insured, it may (1) award interest on the claim from the date the claim was made at the prime rate plus 3%, (2) award punitive damages, and (3) assess court costs and attorney fees against the insurer.
In Rancosky v. Washington National Insurance Co., 170 A.3d 364 (Pa. Sept. 28, 2017), the Pennsylvania Supreme Court set the test for the first time. The plaintiff must show by clear and convincing evidence that (1) the insurer did not have a reasonable basis for denying benefits and (2) the insurer knew of or recklessly disregarded its lack of a reasonable basis. The Court held that proof of a motive of self-interest or ill will is not required, although it is probative of the second element, and it noted that both sides agreed the first element is an objective question of whether a reasonable insurer would have denied payment on the facts presented. The case involved a cancer policy whose holder was told her coverage had lapsed after the insurer relied on a physician’s form showing the wrong disability start date and did not investigate despite her repeated authorizations to contact her doctors and employer.
Can a beneficiary bring a Section 8371 claim?
The statute speaks of bad faith “toward the insured,” and no Pennsylvania appellate decision we have found squarely holds that a named life insurance beneficiary may or may not sue under it. What the decisions do show:
- Intended beneficiaries. In Davin v. Davin, 842 A.2d 469 (Pa. Super. Jan. 30, 2004), the Superior Court said that “it may be tr[u]e a third party beneficiary of an insurance contract has standing under Section 8371,” but held that a second wife whose designation violated an earlier divorce order could not be a beneficiary of the policy and so had no claim. The court used the intended third-party-beneficiary test, under which the contract itself must show an intent to benefit the person suing.
- People who are not beneficiaries. In Strutz v. State Farm Mutual Insurance Co., 609 A.2d 569 (Pa. Super. June 26, 1992), injured claimants who were not intended beneficiaries of another driver’s policy could not sue that driver’s insurer for bad faith; the duty runs to the insured, not to a third-party claimant.
- The estate. In Rottmund v. Continental Assurance Co., 813 F. Supp. 1104 (E.D. Pa. Dec. 14, 1992), a federal court allowed an executrix, acting for the insured’s estate in a dispute over life insurance proceeds, to pursue a Section 8371 claim.
- Beneficiary suits in practice. Federal courts have let named beneficiaries’ Section 8371 claims go forward without treating standing as a barrier. In Lomma v. Ohio National Life Assurance Corp., 283 F. Supp. 3d 240 (M.D. Pa. Sept. 6, 2017), the children of an insured who died by suicide sued as beneficiaries, and the court refused to dismiss their bad faith count.
A beneficiary who is named in the policy is usually in a stronger position than the claimants in Strutz or Davin, but an insurer may still argue the point.
Deadline
A Section 8371 claim is a statutory tort with a two-year limitations period under 42 Pa.C.S. § 5524, not the six-year period for contract claims. The Pennsylvania Supreme Court settled this in Ash v. Continental Insurance Co., 932 A.2d 877 (Pa. Oct. 11, 2007). A breach-of-contract claim for the policy benefits has its own, longer period, so the bad faith claim can expire first.
Employer plans. In Barber v. UNUM Life Insurance Co. of America, 383 F.3d 134 (3d Cir. 2004), a disability-benefits case, the Third Circuit held that Section 8371 is preempted by ERISA, both because it conflicts with ERISA’s exclusive civil enforcement scheme and under ERISA’s express preemption clause. A beneficiary of an employer-provided group life policy governed by ERISA generally cannot add a Section 8371 claim; see employer group life.
When the beneficiary caused the death, or abused an older insured
Chapter 88 of the Probate, Estates and Fiduciaries Code bars a slayer, defined as a person who participates as a principal or as an accessory before the fact in the willful and unlawful killing of another, from acquiring any property or benefit as a result of the death (20 Pa.C.S. §§ 8801, 8802). Proceeds payable to the slayer as beneficiary are paid to the decedent’s estate, unless the policy names an alternative beneficiary who does not claim through the slayer (§ 8811(a)).
A 2024 amendment (Act 40, approved July 1, 2024, effective 180 days later) extended the same treatment to an elder abuser, defined as a person convicted of certain assault, sexual, theft or forgery offenses committed against a victim aged 60 or older (§ 8801). An insurer that pays according to the policy terms without notice of the killing or the elder abuse is not subject to additional liability (§ 8812), so a family member with concerns should notify the insurer in writing before it pays.
Divorce, or death during a divorce: 20 Pa.C.S. 6111.2
Pennsylvania’s rule goes further than most because it can apply before a divorce is final. Section 6111.2 covers a Pennsylvania domiciliary who named the spouse as beneficiary of a life insurance policy, annuity, pension or similar arrangement and who either was divorced at death or died while divorce proceedings were pending, with no decree yet entered but grounds established under 23 Pa.C.S. 3323(g). A designation of the spouse that was still revocable at death becomes ineffective and is read as if the spouse died first, unless the designation’s wording, a court order, a written contract between the spouses, or a new designation made after the decree shows it was meant to survive.
Unless a court order restrains it, an insurer is not liable for paying the spouse if the payment would have been proper without this section. The spouse who was paid must answer to anyone harmed by the payment (6111.2(c)). Federal law can override this for employer plans (Egelhoff).
Worked example
An insured dies on January 5, 2026. The beneficiary submits the claim form and certified death certificate, completing the proofs of loss, on Monday, February 2. The insurer should accept or deny within 15 working days, by about February 23 (a state holiday would push that later), or explain in writing why it needs more time. If it pays on March 20, more than 30 days after proof, it owes interest at its deposit rate from January 5 through March 20. Had the beneficiary waited until September to submit proof, more than 180 days after death, interest would run only from the date of proof. If the insurer denies the claim without a reasonable basis and knows it or recklessly disregards it, the beneficiary may consider a Section 8371 claim, subject to the open question noted above about who may bring one.
Making a complaint
The Pennsylvania Insurance Department takes complaints and questions online: File a Complaint, Ask a Question or Get Help. The time limit for suing keeps running while a complaint is pending.
Sources
- Insurance Company Law of 1921 (Act 284), §§ 410, 411, 411A and 411B, official text: palegis.us. Read November 2, 2026.
- Unfair Insurance Practices Act (Act 205 of 1974), § 5(a)(10): palegis.us. Read November 2, 2026.
- 31 Pa. Code §§ 146.5, 146.6 and 146.7: pacodeandbulletin.gov. Read November 2, 2026.
- 42 Pa.C.S. § 8371 and 20 Pa.C.S. §§ 8801, 8802, 8811, 8812: palegis.us. Read November 2, 2026.
- Rancosky v. Washington National Ins. Co., 170 A.3d 364 (Pa. 2017), No. 28 WAP 2016: full opinion (CourtListener). Read November 2, 2026.
- Barber v. UNUM Life Ins. Co. of Am., 383 F.3d 134 (3d Cir. 2004) (full opinion, CourtListener): courtlistener.com. Read November 3, 2026.
- 20 Pa.C.S. 6111.2 (Pennsylvania General Assembly): palegis.us.
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.