(1) Notwithstanding any other provision of law, each insurer admitted to transact the business of life insurance in this state shall pay interest on the death benefits using an interest rate that is not less than the rate of interest for proceeds left on deposit with the insurer and subject to withdrawal on demand for the period beginning at the date of death through thirty days following the date of receipt by the insurer of a complete request for payout includingdue proof of death. From that date until the date of settlement of the claim, the annual rate of interest shall be two percentage points above the federal discount rate, which rate shall be the rate of interest a commercial bank pays to the federal reserve bank of Kansas City using a government bond or other eligible paper as security and shall be rounded to the nearest full percent. If the claim is denied and a judgment is rendered against the insurer, the annual rate of interest from the date the action was filed until payment of the claim shall be four percentage points above the federal discount rate, except to the extent such proceeds were deposited with the court in an interpleader action. Any other life insurance policy or contract benefits shall accrue interest at a rate of at least two percentage points above the federal discount rate when any such benefits are not paid more than thirty days after the date of receipt by an insurer of a complete request for payment from an insured. The rates referred to in this subsection (1) shall be determined using a weighted average of the rates in effect during the applicable period based upon the number of days the rate was in effect.

(2) This section shall not require the payment of interest in any case in which the beneficiary elects in writing, delivered to the insurer, to receive the proceeds of the policy by any means other than a lump sum payment thereof.

(3) Nothing in this section shall be construed to allow any insurer admitted to transact the business of life insurance in this state to withhold payment of benefits under a life insurance policy to any beneficiary for a period longer than reasonably necessary to make such payment.

(4) For the purposes of this section, the term "life insurance" shall include:

(a) All individual and group life insurance policies issued in accordance with the provisions of this article;

(b) Life insurance plans issued in connection with part 6 of article 50 of title 24, C.R.S.;

(c) Life insurance policies issued in accordance with the provisions of article 9 of this title;

(d) Life insurance policies or certificates issued in accordance with the provisions of article 10 of this title;

(e) Life insurance benefits payable under accident only type policies; and

(f) Life insurance policies or certificates issued by fraternal benefit societies licensed to do business in this state under article 14 of this title.