Irish Life - which pays out more in death benefit than any other company - and Guardian Life, both pay out any accrued interest from the actual date of death rather than notification of death. Finally, while any policy benefits are paid tax free, any interest that may have built up before the cheque arrives, is subject to 26 per cent DIRT which will be passed on to the Revenue.

The accountant, Ms Dervilla Whelan, a partner with the Dublin firm O'Hare and Associates, told Family Money of a recently widowed client who received a sizeable collective settlement based on her late husband's life assurance and pension funds which had been invested with a number of different insurers.

According to Irish Life, the company pays a flat 3 or 5 per cent annual interest rate refund depending on whether the benefit is up to or in excess of £25,000. (The higher amount attracting the higher interest rate). Standard Life and Scottish Provident each pay a flat 5 per cent, while Guardian Life and Norwich both pay approximately the equivalent interbank rate for higher sums - between 3-4 per cent at the moment, though this can fluctuate daily. Equitable Life and Eagle Star calculate back interest in a more complicated way, by relating it to the performance of various investment funds. In the case of Equitable it mirrors the unit price of the cash fund - currently between 4 per cent and 4.3 per cent for the most recent three-month period, for example. Any back interest Eagle Star pays is based on the current performances of the funds from which the benefit is paid, said a spokesman. In the case of late interest payable on a pension fund, the annual interest rate is currently in the region of 9 per cent while life assurance fund interest payments would be approximately 7.3 per cent. The terms under which these payments are made also vary from company to company with most only paying back interest from the notification of death, not the actual date of death. Some contracts specify that interest is paid only if they still have not paid the benefit after an initial 30-day period from notification of death. Irish Life - which pays out more in death benefit than any other company - and Guardian Life, both pay out any accrued interest from the actual date of death rather than notification of death. Finally, while any policy benefits are paid tax free, any interest that may have built up before the cheque arrives, is subject to 26 per cent DIRT which will be withheld and passed on to the Revenue.

That insurance companies pay out different rates of return on investment funds is perfectly understandable - each one has a different group of fund managers picking and choosing investment portfolios and each sets its own associated costs and charges. That they should all pay a different interest rate on overdue or uncollected policy benefits did come as a surprise to one Dublin accountant recently. The accountant, Ms Dervilla Whelan, a partner with the Dublin firm O'Hare and Associates, told Family Money of a recently widowed client who received a sizeable collective settlement based on her late husband's life assurance and pension funds which had been invested with a number of different insurers. "Circumstances meant there was a longer than normal delay between the time of death or notification of death and the receipt of cheques from the various insurance companies," says Ms Whelan. "Interest became due on the funds. But what really surprised us was the huge variation in the interest that was paid - from as low as 3 per cent to as high as 9 per cent."

Family Money checked with seven major insurers - Irish Life, Eagle Star, Norwich Union, Guardian Life, Standard Life and Scottish Life and Equitable Life about the level of interest each pays on delayed settlement of benefits - regardless of whether it is the company or the recipient's fault. The divergence of rates is quite remarkable. According to Irish Life, the company pays a flat 3 or 5 per cent annual interest rate refund depending on whether the benefit is up to or in excess of £25,000. (The higher amount attracting the higher interest rate). Standard Life and Scottish Provident each pay a flat 5 per cent, while Guardian Life and Norwich both pay approximately the equivalent interbank rate for higher sums - between 3-4 per cent at the moment, though this can fluctuate daily. Equitable Life and Eagle Star calculate back interest in a more complicated way, by relating it to the performance of various investment funds. In the case of Equitable it mirrors the unit price of the cash fund - currently between 4 per cent and 4.3 per cent for the most recent three-month period, for example. Any back interest Eagle Star pays is based on the current performances of the funds from which the benefit is paid, said a spokesman. In the case of late interest payable on a pension fund, the annual interest rate is currently in the region of 9 per cent while life assurance fund interest payments would be approximately 7.3 per cent.

The terms under which these payments are made also vary from company to company with most only paying back interest from the notification of death, not the actual date of death. Some contracts specify that interest is paid only if they still have not paid the benefit after an initial 30-day period from notification of death. Irish Life - which pays out more in death benefit than any other company - and Guardian Life, both pay out any accrued interest from the actual date of death rather than notification of death. Finally, while any policy benefits are paid tax free, any interest that may have built up before the cheque arrives, is subject to 26 per cent DIRT which will be passed on to the Revenue.