Both my sister and I were listed on my recently deceased father as beneficiaries. My sister was listed first and the insurance company paid her the proceeds. Is this right?

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Asked May 13, 2013

1 Answer

There must have been some sort of reasoning behind the insurance company paying out to your sister but not to you. The reason could be that your sister was listed as the executor of the estate, or as the primary beneficiary, but even in those situations, you should have received a portion of the proceeds after the estate was settled. Life insurance companies do not pick the "first person on the list" to receive the proceeds of a policy, they distribute the proceeds exactly as the policy owner stipulated when the policy was purchased.

It could also be possible that you were listed as a secondary recipient, and only expected to receive a payout if you outlived your sister. When your dad purchased the policy, he had the option of setting up the beneficiaries exactly as he saw fit, and it may have been his desire to give precedence to your sister. But since there was also a chance of your sister passing away before or at the same time as your father, then you were named as a secondary beneficiary.

When more than one beneficiary is named in a life insurance policy, the proceeds are divided up as specified in the policy. For example, your father may have left most of the money to your sister, perhaps because he felt she deserved it for her assistance during his failing years, but a smaller portion was also earmarked to be delivered to you. But this method would have resulted in your receiving a portion of the policy, not being left out entirely.

If the policy paid into your father's estate, then it would be used to pay off bills of the estate before any remaining amounts were distributed among beneficiaries. In this situation, you may not receive a portion of the money because most of it went to the estate and then your sister was named as the primary beneficiary of the remaining amount. If the value of the policy was exhausted before your share was meted out, you would come up without any income based on the life insurance policy because there simply was not anything left to give to you.

If you have additional questions, you should speak with a local insurance agent or contact the insurer directly.

Answered May 13, 2013 by Anonymous

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