Life Insurance Interpleader Lawsuits Fact Sheet
Christian Lassen, Esq. | Quoted in The Wall Street Journal | 25 Years Experience Helping beneficiaries nationwide resolve life insurance interpleader disputes.
What Is a Life Insurance Interpleader?
An interpleader occurs when an insurance company cannot determine who is entitled to life insurance proceeds. The insurer deposits the funds with the court, names all potential claimants as defendants, and exits the case. Beneficiaries must then litigate to prove their right to the money.
Interpleaders are common when there are conflicting claims, unclear designations, or disputes among heirs.
Why Insurers File Interpleaders
Insurance companies file interpleaders to avoid liability for paying the wrong person. Common triggers include:
- Divorce without updated beneficiary designations
- Death without a valid or clear beneficiary designation
- Disputes between current spouse and children from prior marriages
- Allegations of undue influence or forgery
- Simultaneous deaths (insured and beneficiary die together)
- Employer errors in updating group policy records
- Claims from alleged common‑law spouses
- Deathbed changes to beneficiary designations
- Competing claims between named beneficiary and estate
- Multiple conflicting beneficiary forms
While insurers have the right to file interpleaders, they sometimes do so prematurely or unnecessarily.
What To Do If You Are Named in an Interpleader
- Do not ignore court papers deadlines are strict.
- Contact an experienced life insurance attorney immediately.
- Gather all documents policy, beneficiary forms, correspondence, and evidence of designation validity.
- Prepare to defend your claim aggressively with legal support.
- Act quickly failing to respond can result in losing your claim by default.
Your Legal Rights
- Beneficiaries have the right to contest competing claims in court.
- Courts decide who is entitled to the proceeds based on evidence and law.
- Legal representation ensures your interests are protected against improper or fraudulent claims.
Case Example
We helped a surviving daughter recover $500,000 in an interpleader lawsuit after a former spouse contested the designation. By proving the change was valid, we secured full payment for the rightful beneficiary.
Frequently Asked Questions
Q: What happens if I ignore an interpleader lawsuit?
A: You risk losing your claim by default. Always respond promptly.
Q: Can divorce automatically revoke a beneficiary designation?
A: In many states, yes, but disputes can be challenged depending on the circumstances.
Q: What if multiple beneficiary forms exist?
A: Courts determine which designation is valid. Attorneys can help prove your claim.
Q: Do I need an attorney?
A: Yes, interpleader lawsuits are complex and require aggressive legal defense.
How We Help
- Defend beneficiaries named in interpleader lawsuits.
- Gather evidence to prove rightful entitlement.
- Challenge improper or fraudulent competing claims.
- Negotiate settlements or litigate aggressively in court.
- Secure rightful payouts for families nationwide.
Contact Us
If you are named in a life insurance interpleader lawsuit, don’t wait. Early legal action often determines the outcome. Call 800‑330‑2274 for a free consultation. No fees unless we win.
Key Takeaways
- Interpleaders occur when insurers deposit funds with the court due to conflicting claims.
- Beneficiaries must defend their rights in court.
- Common causes include divorce, unclear designations, fraud, or competing heirs.
- Prompt legal action is critical to securing benefits.
Free Case Evaluation Contact Us!
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: Dec 7, 2025 | 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 Right Choice for Your Claim
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“My mom died after a non-traditional medical procedure, and the insurer refused to pay. Lassen Law proved the treatment had nothing to do with the cause of death. They fought like it was their own family involved.”- Emily N.
Why The Lassen Law Firm Is Different
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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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