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The situation is surprisingly common: You’re the second wife. You married your husband over ten years ago. When he passed away unexpectedly last month, you found that he had never remembered to change the beneficiary on his life insurance policy. The proceeds went to his first wife, who was married to him for “18 miserable months,” as your husband used to say.

This isn’t fair. It’s not right. But the key question is this: Is it too late to do something about it?

What to do when disputing life insurance beneficiary

There are plenty of other situations where people have been cheated out of life insurance benefits they believe should be rightfully theirs. Some common examples cited by our clients include:

  • A grandfather tells the family he has changed his life insurance beneficiary to his newborn (sole) grandchild. After Grandpa passes, the life insurance company says that the paperwork to change the designated beneficiary was not fully completed and so the original beneficiary will get the money.
  • When Rudy gets a divorce from Sandra, the terms of the final divorce decree says he must keep paying premiums on his life insurance policy and make sure Sandra remains the beneficiary, in order to provide his ex-wife with a measure of financial security in her old age. Rudy keeps paying for the insurance, but he changes the beneficiary to his new wife when he remarries.
  • Mrs. Goddard has been living in a nursing home for just over a year when she dies. She had a mild dementia in her later years. After her death, her adult children discover that, only a few weeks earlier, the beneficiary for Mrs. Goddard’s life insurance policy was changed to her nursing home caretaker.

We’ll tell you this straight out: challenging a life insurance beneficiary designation is hard. An insurance policy is a contract between the insured person and the issuing company, and it is rare that a third party can muster the proof to show that the beneficiary is the wrong one. Unlike a will, a life insurance settlement does not go through probate, so there is no automatic court scrutiny document. Writing to the insurance company will accomplish nothing. The only way to change the beneficiary after the policyholder dies is through the courts.

However, sometimes there are sufficient grounds to proceed with a case:

  • State law may make special provisions for changing life insurance beneficiaries after a divorce.
  • Divorce decrees may enable a former spouse to make a claim against the beneficiary if the divorce orders were not followed.
  • Federal law (such as ERISA, the Employee Retirement Income Security Act) may override the policyholder’s designation of a beneficiary for employment-based life insurance.

Getting help when disputing life insurance beneficiary

Challenging a life insurance beneficiary is a complex and challenging undertaking. The best way to deal with this sort of problem is to avoid it in the first place. Encourage family members to review their life insurance policies regularly, to make sure the money will actually go to the person they intend to receive it. This should become a high priority after any major life change, such as marriage, divorce, a birth, or a death.

If you must take the issue to court, hire life insurance lawyers with a depth of experience in cases like yours. Choose a lawyer who will not recommend taking the first settlement offer—even a poor one—but hold out for a skilled trial attorney who is ready to take your case into the courtroom if a fair settlement cannot be reached.

The attorneys at Life Insurance Law can provide the skilled legal representation your case demands. We can carry out the detailed investigation of your life insurance case to determine if undue influence, declining faculties, or coercion was used to assign a beneficiary. We are well versed in applicable state and federal laws that may give your challenge a fighting chance. We won’t collect a fee unless you get paid first. Call us today at (215) 523-6900 for a FREE consultation about your potential claim or to ask about any other life insurance legal matter.