Can I challenge a life insurance beneficiary?
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Asked July 27, 2010
There are many legitimate reasons for challenging the beneficiary on a life insurance policy. One such example might be an heir that was born after the policy was written, and the policy was not updated to reflect the new family member. The main problem with challenging a beneficiary is that it can take years to resolve a dispute and the legal battle can be extremely expensive, whittling the inheritance away to nothing before it is ever distributed.
If the named beneficiaries agree with the proposed changed, the beneficiary can be changed fairly easily. Contact the insurance company that issued the policy and explain the circumstances. They will need to verify the change with the beneficiaries listed on the policy and collect some information about the one being added, but it will not be necessary to go through a court battle.
Where the challenge is being contested by the current beneficiaries named on the policy, you will need to present compelling evidence to support a claim of beneficiary. In most cases, this proof will either be in the form of evidence that the beneficiary should have been added or substituted but that the policy was simply not updated, or documentation that shows the deceased was solely responsible for the care of the new beneficiary. Exactly what you will need to prove depends on the amount of resistance from the currently listed beneficiaries. In most cases, the cost of challenging the policy outweighs any benefits of the challenge, and most such cases are referred to third party mediation before seeking legal courses of action.
In mediation, all parties are brought together and an attempt to negotiate the settlement is made. If all parties can agree to a set of changes, those changes can be submitted to the court for approval and then written into the policy. This can be a difficult process, but it is much less expensive than going to court, which protects the claim settlement for the people who depend on it rather than squandering it away in court.
Answered July 27, 2010 by Anonymous