Yes. A life insurance beneficiary change made using a Power of Attorney can absolutely be contested, and these disputes are increasingly common. Insurers, courts, and families closely scrutinize any beneficiary change executed by an agent rather than the policyholder, especially when the change benefits the agent or alters long-standing estate plans.
This article focuses specifically on when a Power of Attorney beneficiary change is legally valid, when it fails, and how these changes are challenged after death.
When you are facing a beneficiary dispute, we are here for you. Look at our beneficiary dispute fact sheet for more information.
What a Power of Attorney Can and Cannot Do With Life Insurance
A Power of Attorney allows one person, the agent, to act on behalf of another, the principal. However, life insurance is treated differently than many other financial assets. Authority over life insurance policies must usually be express, specific, and clearly documented.
In most states, a general Power of Attorney is not enough to change beneficiaries unless it explicitly references life insurance and beneficiary designations.
Key limitations include:
Authority ends immediately upon death
Authority must be expressly granted, not implied
Authority is interpreted narrowly by insurers
Self-benefiting actions are presumed improper
Insurance companies are not required to accept beneficiary changes made under ambiguous or overly broad POA language.
When a POA Beneficiary Change Is Most Likely to Be Challenged
Contested cases tend to fall into predictable patterns. A beneficiary change is most vulnerable when one or more of the following applies:
The agent names themselves as beneficiary
The change occurred shortly before death
The policyholder was elderly or cognitively impaired
The change contradicts prior beneficiary designations
The POA was executed close in time to incapacity
Family members were unaware of the change
Courts often treat these situations as red flags and shift the burden to the agent to prove the change was valid.
Capacity Matters More Than the Power of Attorney
Even if a Power of Attorney technically authorizes beneficiary changes, the policyholder’s mental capacity at the time of execution is critical.
A valid beneficiary change requires that the policyholder either:
Had capacity when granting the POA, or
Retained capacity when directing the agent to act
If the policyholder lacked capacity at either stage, the beneficiary change can be invalidated.
Medical records, medication history, caregiver testimony, and timing often determine the outcome.
Why Self-Dealing Is the Biggest Legal Problem
Courts treat life insurance beneficiary changes differently from routine financial transactions because the benefit is paid only after death and cannot be corrected later.
If an agent uses a Power of Attorney to name themselves as beneficiary, courts generally presume:
Undue influence
Breach of fiduciary duty
Improper self-dealing
To overcome that presumption, the agent must show clear evidence that the policyholder knowingly intended the change and was not pressured.
Absent that proof, courts frequently restore the prior beneficiary designation.
What Happens When Insurers Accept a Defective POA Change
Insurance companies sometimes process beneficiary changes without closely reviewing POA authority. That does not make the change immune from challenge.
After death, insurers may respond by:
Freezing the proceeds
Filing an interpleader lawsuit
Paying one party and forcing litigation later
If the change is invalid, the insurer may still be required to pay the rightful beneficiary even after issuing funds to the wrong party.
Can a POA Be Used to Remove All Beneficiaries?
An agent generally cannot remove beneficiaries and leave a policy without a valid designation unless the POA clearly authorizes that action.
If a policyholder dies without a valid beneficiary due to an improper POA action, proceeds usually pass to the estate. This creates delays, probate exposure, and potential loss of tax advantages.
These cases are frequently contested by individuals who would have received benefits under the prior designation.
Deadlines and Evidence in POA Beneficiary Disputes
Challenging a POA-based beneficiary change is time sensitive. Evidence degrades quickly and insurers impose strict deadlines.
Critical evidence includes:
The Power of Attorney document
Policy change forms and timestamps
Medical and cognitive records
Prior beneficiary history
Communications with the insurer
Witness testimony regarding influence
Delays can permanently weaken an otherwise strong claim.
When Legal Action Is Usually Necessary
POA life insurance disputes rarely resolve through informal insurer review alone. Legal action is often required when:
The agent is also the beneficiary
The insurer refuses to reverse the change
Multiple claimants assert rights
Estate plans conflict with the policy
The insurer has already released funds
These cases often involve fiduciary law, insurance contract law, and state probate principles working together.
When to Speak With a Life Insurance Attorney
If a beneficiary change was made using a Power of Attorney and you believe it was improper, waiting can cost you the claim entirely.
A life insurance attorney can:
Analyze whether the POA granted valid authority
Identify fiduciary breaches or undue influence
Challenge insurer acceptance of invalid changes
Recover benefits wrongfully diverted
Protect against procedural defaults
POA misuse cases are fact-driven and technical. Early review makes a decisive difference.