What is a Beneficiary?
A beneficiary is an individual or entity designated by the policyholder to receive the proceeds of a life insurance policy upon the insured’s death. Think of the beneficiary as the intended recipient of the financial protection provided by the life insurance policy. This designation is a cornerstone of the policy, outlining who will benefit from the coverage in the event of the insured’s demise.Types of Beneficiaries
The primary beneficiary is the first in line to receive the proceeds of a life insurance policy upon the insured’s death, taking precedence over any other beneficiaries listed. If the primary beneficiary predeceases the insured or is unable to receive the proceeds for any reason, the contingent beneficiary then steps in to receive the benefits. This designation serves as a backup plan to ensure that the policy proceeds are directed according to the insured’s wishes.What Happens When the Policyholder Dies?
When the policyholder passes away, the life insurance company is notified of the death. Upon receiving the death certificate and the necessary documentation, the insurer initiates the claims process. The beneficiary, or their representative, must file a claim with the life insurance company by submitting the required documentation, including the death certificate and any other forms specified by the insurer. The insurer then verifies the validity of the claim and reviews the policy to ensure that all conditions for the payout are met. This verification process may include confirming that the policy was in force at the time of the insured’s death and that the cause of death is covered by the policy. Once the claim is deemed valid and all necessary checks are completed, the insurer processes the claim and disburses the proceeds to the designated beneficiary. This typically involves issuing a lump-sum payment, although other payout options may be available depending on the policy terms. It is important to be aware of the potential tax implications associated with life insurance proceeds. While life insurance death benefits are generally not taxable as income to the beneficiary, there are exceptions and special circumstances that may warrant further consideration.Life Insurance Denial Statistics
20%
The annual average number of life insurance claims denied.
$50 Million
The yearly average dollar amount of claims denied by life insurance companies.
.2%
The number of claims appealed annually by consumers.
Can a Life Insurance Beneficiary be Changed After Death?
One of the fundamental principles of life insurance is the irrevocability of beneficiary designations after the insured’s death. In most cases, once the policyholder has passed away, the named beneficiary or beneficiaries have a vested right to the proceeds of the policy. This means that the designation typically cannot be altered after death.Legal Precedents and Constraints
The legal precedent supporting the irrevocability of beneficiary designations after death is well-established. Courts have consistently upheld the principle that the wishes of the deceased, as expressed through the beneficiary designation, must be honored. Attempting to change beneficiaries after death would undermine the finality and integrity of the insured’s intentions.Exceptions and Limited Scenarios
Although the general rule is that beneficiaries cannot be changed after the insured’s death, there are a few limited scenarios where exceptions may apply. One such scenario involves contingent beneficiaries. If the primary beneficiary predeceases the insured or is otherwise unable to receive the proceeds, the contingent beneficiaries may then receive the proceeds as originally designated. In rare instances, legal challenges may arise where beneficiaries contest the validity of the beneficiary designation. They may allege fraud, coercion, or lack of capacity on the part of the insured. If a court determines that the designation is invalid, it may order a change in beneficiaries. Additionally, some life insurance policies may contain specific provisions allowing for post-mortem beneficiary changes under certain circumstances. These provisions are typically rare and must be clearly outlined in the policy contract.
We contacted Trief & Olk to help us with a life insurance issue and Shelly Friedland was the attorney assigned to our case. Before Shelly took our case she explained to us that the likelihood of our success without going to court was possible but not likely. Unfortunately we did not get the outcome we had hoped for but it was our decision to not move forward and have our case litigated. Shelly is very knowledgeable and was very straight-forward in her assessment of our case as we moved forward. She was very patient and thorough in answering our questions. She always responded in a timely manner and listened to our concerns. We would certainly recommend Shelly and would use her firm again in the future.”
- John Ramig
If there is any possibility of winning your life insurance case – this is the place to do it for you. They are efficient, honest and will achieve the best possible outcome.
Shelly Friedland worked on my case where a life insurance policy had lapsed and was even a few days beyond the grace period. Farmers had rejected my claim twice and was unwilling to take a second look. Shelly was able to get them to pay the entire claim without going to court, and the full amount was deposited in my account within a couple months. Highest recommendation.”
- Kathleen Brown
Trief & Olk is a superior law firm. Their attorneys and other legal professionals have a brilliant understanding of the law and the litigation process. They diligently perform their work in an efficient, strategic and cost-effective manner to ensure the best possible outcomes for their clients.
- Christopher Hughes
