How have courts treated a claim for prejudgment interest in a life insurance contract?

Sheehan v. Guardian Life Ins. Co. (8th Cir.2004) 372 F.3d 962 ( Sheehan ) is instructive. In that case, having to do with the entitlement to insurance benefits, the contract was silent on whether the insurer would pay interest on benefits that were not paid when due. ( Id. at p. 968.) The district court treated the claim for prejudgment interest as an equitable matter, pursuant to title 29 U.S.C. section 1132(a)(3)(B). ( Sheehan, supra, 372 F.3d at p. 969.) The appellate court, reviewing the matter for abuse of discretion, held that the district court did not err in finding that the beneficiary was entitled to prejudgment interest. ( Id. at pp. 968969.) It further held that the district court properly applied the interest rate set forth in title 28 United States Code section 1961. ( Id. at p. 969.)