All the following are common elements of an interpleader action by a life insurance company EXCEPT:

• A. Two or more parties claim the same death benefit.
• B. The insurer has no claim on the proceeds.
• C. The insurer pays the benefits to the court and asks the court to determine the rightful recipient.
• D. The insurer may face penalties for delaying settlement.

Answer: (D)

Interpleader is used when a life insurer, holding a death benefit, faces competing claims to the same proceeds and wants to avoid selecting a beneficiary itself. The insurer steps in as a neutral stakeholder and deposits the benefit with the court, seeking the court to determine who is entitled to receive the funds. This mechanism protects the insurer from multiple liability and from potential penalties for paying the wrong claimant.

The common elements are that two or more claimants assert the same death benefit, the insurer does not claim ownership of the proceeds itself, and the insurer brings the funds to the court so the court can decide who should receive them. The idea that the insurer may face penalties for delaying settlement is not a standard feature of the interpleader process; penalties for delay aren’t built into interpleader as a core element.