Life Insurance Beneficiary Disputes Fact Sheet
Christian Lassen, Esq. | Quoted in The Wall Street Journal | 25 Years Experience Helping beneficiaries nationwide resolve life insurance disputes and enforce their rights.
What Is a Beneficiary Dispute
A beneficiary dispute arises when multiple individuals claim the right to receive life insurance proceeds or when the validity of a beneficiary designation is questioned. These disputes often involve allegations of fraud, undue influence, lack of capacity, or improper execution of beneficiary changes.
Insurance companies often delay payment or ask courts to resolve the dispute before releasing funds.
Why Beneficiary Disputes Occur
Beneficiary disputes frequently result from life changes that were not properly reflected in insurance records.
Common causes include:
• Conflicting beneficiary designations
• Divorce or remarriage
• Allegations of undue influence or coercion
• Claims of mental incapacity
• Employer processing errors
• Blended family disputes
• Improperly completed designation forms
• Allegations of forgery
• Interpleader actions filed by insurers
Immediate Steps To Take
- Gather all policy and beneficiary documents
- Request complete designation records from the insurer
- Keep copies of all correspondence
- Avoid contacting competing claimants
- Be mindful of legal deadlines
Legal Principles to Know
• Beneficiary designations generally control payment
• Courts resolve disputes between competing claimants
• Interpleader lawsuits shift disputes to court
• Legal representation protects beneficiary rights
Frequently Asked Questions
What is an interpleader lawsuit
It is when the insurer asks a court to decide who receives the proceeds.
Can divorce revoke a beneficiary designation
In many cases, yes, but outcomes depend on law and circumstances.
What if multiple forms exist
Courts determine which designation is valid.
Is legal representation necessary
Yes. Beneficiary disputes often involve litigation.
Key Takeaways
• Beneficiary disputes are common and complex
• Insurers often delay payment during disputes
• Courts resolve competing claims
• Early legal action improves outcomes
For legal representation and detailed guidance, see our main page on Life Insurance Beneficiary Disputes or contact our office for a free consultation.
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Written & Reviewed by Christian Lassen, Esq., Nationally recognized life insurance lawyer: 25 years experience, hundreds of millions recovered. Quoted in The Wall Street Journal ( May 17, 2025).
Last reviewed: Jan 3, 2026 | Contact 800-330-2274
Our FAQ
Have questions? We are here to help. Still have questions or can't find the answer you need? Give us a call at 800-330-2274 today!
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A grace period is the time after a missed payment during which the policy remains in force, usually 30 to 60 days depending on state law and policy terms.
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No. In most states, insurers must send a written notice of overdue premiums and warn of pending lapse before terminating coverage.
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The policy may still be enforceable. Beneficiaries can challenge the lapse based on the insurer’s failure to provide required notice.
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Yes. If the insured dies during the grace period, the policy is still considered active, and benefits should be paid.
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Yes. In group life insurance policies, employers sometimes fail to forward premiums properly, leading to wrongful lapse denials.
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Yes. If automatic payment setups fail through no fault of the insured, lapses may be challenged.
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Some policies automatically borrow against cash value to cover missed payments. Failure to apply this correctly can lead to wrongful lapse claims.
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Possibly. Some courts excuse nonpayment if the insured was mentally incapacitated and missed premiums without proper notice.
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No. Reinstatement must occur while the insured is alive, but wrongful lapse denials can still be challenged posthumously.
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Not without following strict notice and grace period rules. Beneficiaries can often challenge technical denials.
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Deadlines vary by state, but it’s critical to act within 1 to 5 years depending on the policy and jurisdiction.
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Not necessarily. Payments mailed within grace periods or accepted by insurers may keep coverage active.
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Bank records, payment receipts, insurer correspondence, and premium notices are key evidence.
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If the insurer used an outdated address despite updated information, lapse denials can often be overturned.
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Possibly. If the insured submitted a reinstatement application before death, it may help challenge a lapse denial.
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In some states, special grace periods and protections applied during COVID-19 emergencies. They can help fight wrongful lapses.
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Only if the insurer followed all legal notice and grace period requirements. Otherwise, beneficiaries may still recover.
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Misapplied premiums can lead to wrongful lapses — and courts often hold insurers accountable for these errors.
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An attorney can obtain records, challenge improper lapses, negotiate settlements, and litigate if necessary to enforce payment.
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“The insurer said there was a misstatement in the application and flat-out denied the claim. I contacted the Lassen Law Firm, and they immediately launched a legal challenge. In the end, they got the full benefit paid without me even stepping into a courtroom.”- Karen D.
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With over two decades of exclusive focus on life insurance litigation, we’ve helped thousands of families recover wrongfully denied benefits. Our reputation for fast, strategic resolutions has made us a trusted national resource for complex claim disputes.
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