Why did Q's beneficiary receive an amount higher than the policy's face amount of $25,000 upon Q's death?

The beneficiary receiving an amount higher than the policy's face amount of $25,000 due to the insurer needing to pay interest on the proceeds starting from the date of death is a valid scenario. In life insurance policies, when a death benefit is paid to a beneficiary, the insurance company often includes interest accrued on the death benefit amount from the date of the insured's passing until the payment is actually made. This ensures the beneficiary does not receive just the flat face value of the policy but also a financial benefit from the period during which the insurer held those funds.

This interest accrual reflects a fair practice since beneficiaries typically need timely access to the funds, and the insurance company is responsible for any delay in payment following the insured’s death.

Other options do not accurately explain why the beneficiary received more than the stated face amount. For instance, while built-in cash value can be a feature of certain whole life policies, it wouldn't directly contribute to an immediate payout exceeding the face amount in this case. Similarly, additional payments owed to a beneficiary and high-yield investment plans are not standard causes for increasing death benefits at the time of a claim without specific mechanisms outlined in the policy. Hence, the payment of interest on the proceeds represents the most logical and prevalent