The person insured by a life insurance policy can change beneficiaries for the duration of the policy. The only real limitations the insured person may have on changing or designating new beneficiaries to their life insurance policy are those limitations described in the provisions of their life insurance policy. However, there are times when a change in life insurance policy beneficiaries may cause the life insurance company to deny a claim. In certain situations, a last-minute change in beneficiaries may also allow former beneficiaries to challenge a claim from the current beneficiaries. Our life insurance lawyers recently won a $675,000.00 Prudential life insurance beneficiary dispute.
Last-minute changes in beneficiaries can be a red flag for life insurance companies. Usually, the person insured by a life insurance policy can change their beneficiaries whenever they want, so long as the change complies with any specific requirements in the life insurance policy. However, when the insured person is elderly, severely ill, or lacking mental capacity, and the change in beneficiary happens shortly before the insured person passes away, they may have been unduly influenced by others. For example, a caretaker or estranged family member may convince or influence the vulnerable insured person to add them as a beneficiary on the insured person’s life insurance policy or to remove other beneficiaries. Sometimes, the person taking advantage of the insured person will even “help” the insured person sign the forms necessary to change the beneficiaries. We just resolved a $325,000.00 Mass Mutual life insurance beneficiary dispute.
These types of last-minute changes may be invalid. If the insured person had sufficient mental capacity and was using their own free will when they decided to change the beneficiaries on their life insurance policy, the change in beneficiary will likely be valid. If, however, the insured person was in a vulnerable state, did not have mental capacity, and was unable to use their own free will, the change in beneficiary will likely be determined to be invalid. Also, if a change in beneficiary is questionable, the former beneficiaries (the beneficiaries on the insured person’s life insurance policy before the last-minute change) may submit their claim to the death benefits. The former beneficiaries may also present proof that the insured person’s last-minute change in beneficiary was invalid for various reasons. After just one week, our life insurance law firm resolved a $100,000.00 Globe beneficiary dispute.
Life insurance companies may also deny claims if the beneficiary made a change in the beneficiary that did not comply with the requirements of the insured person’s life insurance policy. Some policies may require that the insured person have a certain amount of witnesses present when signing a change of beneficiaries. Other policies may require that the change of beneficiaries be completed within a certain time before the insured person passes away. If the requirements for changing a beneficiary are complied with, the life insurance company should pay the claim without any issue. However, if the insured person did not comply with the requirements, the life insurance company will likely deny the new beneficiary’s claim.
Both the insured person and the beneficiaries need to understand the life insurance policy’s requirements for changing beneficiaries. If the requirements are not properly complied with, the life insurance company may deny the new beneficiary’s claim. It is also important for the insured person beneficiaries to understand that a life insurance policy may determine a change in beneficiary is invalid if it finds that the change was done when the insured person did not have sufficient mental capacity or free will. Finally, beneficiaries need to understand that they may challenge a change in beneficiaries on the insured person’s life insurance policy if they notice certain red flags.
We can contest any fraudulent beneficiary change and win