Can I Challenge the Designated Beneficiary of a Life Insurance Policy?

NBA Star’s Struggle for Life Causes Discord

Some time ago NBA star and former reality-television personality Lamar Odom was found unconscious on the floor of a brothel in Nevada, (Odom has since recovered).  At the time, there were rumbling storm clouds of looming legal battles if Odom had taken a turn for the worse and died. Most individuals who do not follow sports know Lamar Odom as the former husband of Khloe Kardashian of Keeping Up with the Kardashians. Odom’s and Kardashian’s divorce had not been fully finalized at the time, but even it they were divorced, Kardashian was still in line to receive a substantial amount of money from Odom’s life insurance policy (she is the designated beneficiary) and if he had passed away. This angered Odom’s ex-girlfriend, with whom Odom had two children and who has vowed to fight the reality-TV queen for what she believes she and her children deserve.

It Is Not Easy to Challenge the Designated Beneficiary of a Life Insurance Policy

Suppose that someone in Odom’s situation were to pass away. At the time of his or her death, he or she had a life insurance policy that had the person’s ex-spouse listed as the designated beneficiary and had the other parent of his or her children listed as an alternate beneficiary. Assume further that the person and his or her ex-spouse divorced several years prior to his or her death but the person never got around to changing his or her life insurance beneficiary designation. Would the divorce mean anything to the life insurance company if the primary beneficiary were to file a life insurance claim?

Unfortunately for the alternate beneficiary, the insurance company is likely to pay the designated beneficiary the death benefit regardless of the marital status between the beneficiary and the deceased (some states have statutes preventing an ex-spouse from collecting on a life insurance policy even if they are the designated beneficiary unless the policyholder designates the ex-spouse as the designated beneficiaty post-divorce) . This is because, at its core, the policy between the policyholder and the carrier is a contract whose terms the two parties agreed to at some point in the past. The carrier is ill-equipped and has little appetite for getting involved in a legal dispute over whether the policyholder intended to change the beneficiary designation before his or her death.

Success May Depend on Showing Fraud or Incompetence

An alternate beneficiary looking to challenge the designated beneficiary’s ability to receive the death benefit may need to file a lawsuit and show that the beneficiary designation was made because of fraud, duress, or at a time when the policyholder was incompetent. To use Odom’s circumstances as an example, Odom’s girlfriend would need to show that Kardashian placed Odom in duress, that Odom was unaware of the nature of what he was signing, or that Odom was unable to comprehend what was occurring in order to have a court determine that the life insurance death benefit ought to go to her as opposed to Kardashian. As it may appear, any one of these situations is extremely difficult to prove.

What Lesson Can Be Learned from Lamar Odom?

If nothing else, Lamar Odom’s situation is a reminder for everyone who has a will and/or life insurance policies to have these documents updated whenever a life change such as a birth, death, marriage, or divorce occurs. A life insurance company will, in most cases, pay the designated beneficiary if a proper claim for benefits is presented.

Our Miami life insurance law firm assists Florida residents who have filed a claim for death benefits following the death of a life insurance policyholder but who have not received the benefits they are due. The Law Firm J.P. Gonzalez-Sirgo P.A. offers free consultations and case evaluations. No Recovery, No Lawyer Fees. Call 305-461-1095 or Toll Free 1-866-71-CLAIM.

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