As the owner of a life insurance policy, you most likely have already designated who will receive the settlement upon your death. The beneficiaries are recorded by the insurance company so that the right person will receive the benefit. However, if you get divorced and re-married or if you never listed your additional children as your beneficiaries, those family members can be left with nothing. That means that not only will your loved ones be faced with overwhelming grief, they could also suffer financially.
It is crucial to review your life insurance beneficiaries to make sure the information is up-to-date. Changing and naming a beneficiary is a task that only you can do as the policyholder. After your death, it is very challenging for your loved ones to dispute the named beneficiary.
Your life insurance agent should be able to help you update your policy and ensure that there is no ambiguous language, such as using “wife” as your beneficiary. Major life changes, such as a new marriage, divorce or birth of a child should prompt you to review your policy. You need to be clear on who you name as your beneficiary.
Life Insurance Beneficiary Disputes
Changing a beneficiary after the policyholder passes away is nearly impossible, but it can be done in a very small number of circumstances. For example, if you have re-married, but never removed your ex-spouse’s name from the beneficiary designation, your current spouse may be able to challenge the beneficiary. To dispute a life insurance beneficiary, the life insurance company would need to be alerted of the situation.
During the time that it takes to determine the rightful beneficiary, the life insurance settlement will be paid to a trust held by the court, which is the one responsible for deciding on the legitimacy of any challenge. The life insurance company may not want to be put in a position of deciding what is fair, as the insurer can open itself up to charges of bad-faith.
To succeed with a beneficiary challenge, your loved ones would have to prove in court that fraud, incompetency of the policyholder or some other situation existed, which warrants a change in the beneficiary of the life insurance policy.
Legal Representation for Life Insurance Disputes
If you plan on challenging the beneficiary of a life insurance policy, you will need the assistance of an attorney. Contact J.P. Gonzalez-Sirgo today at 866-71-CLAIM today for legal advice regarding your life insurance dispute.