$156,000 Life Insurance Claim Denial Successfully Overturned
Our life insurance law firm is proud to announce the successful resolution of a $156,000 denied life insurance claim. The case involved a dispute over an unprocessed change of beneficiary form. The insured had submitted the proper paperwork to name a new beneficiary, but the insurer failed to update their records before the policyholder’s death. As a result, the claim was initially denied—or rather, wrongfully paid to an outdated beneficiary. After a thorough legal review and determined advocacy by our team, the rightful beneficiary received the full policy proceeds. This case highlights a common but often misunderstood issue in life insurance disputes: what happens when the insurer doesn’t process a change of beneficiary request in time.
What Happens If a Life Insurance Company Fails to Process a Change of Beneficiary?
If a life insurance company receives a valid change of beneficiary form but fails to process it before the insured’s death, the dispute often centers on whether the insured’s intent was clear and whether the insurer’s delay or negligence caused harm.
In most cases, the insurer will default to paying the last recorded beneficiary on file. However, if there is strong evidence that the insured intended to change beneficiaries and took all necessary steps to do so, the new beneficiary—or their legal representative—may have grounds to contest the payout.
1. Intent and Affirmative Action Are Key
Courts have held that when an insured clearly intends to change a beneficiary, and has taken all required steps—such as completing and submitting the correct form—their intent can override strict administrative technicalities. However, this depends on several factors, including:
Whether the form was properly completed and submitted
Whether the insurance company acknowledged receipt
Whether the insurer had time to process it before death
Whether the delay was due to insurer negligence or internal error
In some cases, insurers misplace or delay paperwork or fail to update their records. If the form was submitted in good faith and the insurer failed to act, legal intervention may be necessary to ensure the correct beneficiary is paid.
2. Evidence That Can Support the New Beneficiary
To challenge an outdated beneficiary designation and prove the insured’s intent to change it, courts often look for:
A copy of the submitted change of beneficiary form
Email or written correspondence with the insurer
Testimony from family members, financial advisors, or HR personnel (for employer policies)
Evidence of consistent intent, such as repeated conversations or prior attempts
The more documentation available to support the claim that the insured intended to change the beneficiary and did everything within their power to do so, the stronger the legal case.
3. Possible Outcomes in Beneficiary Disputes
If a valid dispute arises, the insurer may delay payout and file an interpleader lawsuit, asking the court to decide who is legally entitled to the funds. In these cases, the policy proceeds are deposited with the court, and both parties must submit evidence to support their claims.
Depending on the jurisdiction and the evidence presented, courts may:
Award the entire benefit to the intended (new) beneficiary
Order the benefit to be split between the old and new beneficiaries
Uphold the original beneficiary designation if the evidence is unclear
Legal counsel can make the difference in these cases. Our attorneys are experienced in proving insured intent, uncovering insurer errors, and defending rightful beneficiaries in court.
We Handle Beneficiary Disputes Involving Unprocessed Changes
Disputes over life insurance beneficiary changes are often emotionally and legally complex. Whether the insurer failed to process a form, there’s conflicting paperwork, or multiple individuals claim the right to the benefit, our firm has the experience and legal strategy to resolve these matters efficiently and favorably. We’ve successfully handled beneficiary disputes involving MetLife, Prudential, AuguStar Life, Mutual of Omaha, Voya, and many others.
Frequently Asked Questions
What if the life insurance company didn’t process a change of beneficiary form in time?
If the insured submitted a valid change of beneficiary form before death but the insurer failed to update their records, the new beneficiary may still have a legal claim—especially if they can show the insured’s clear intent and compliance with all requirements.
Who gets the death benefit if the beneficiary change wasn’t processed?
Typically, the insurer will pay the last named beneficiary on file. However, if there’s evidence of an attempted change and intent to name a new beneficiary, courts may override that designation.
Is a handwritten note or email enough to change a life insurance beneficiary?
Generally, no. Most insurers require a formal form, properly signed and submitted. However, these informal communications may still be used as supporting evidence to prove intent if a formal change was submitted but not processed.
Can an employer be responsible for failing to submit a beneficiary change to the insurance company?
Yes. In employer-sponsored group life insurance plans, HR departments often handle submissions. If the employer failed to forward the change form or mismanaged the paperwork, the new beneficiary may have a claim for benefits—or a claim against the employer under ERISA rules.
What is an interpleader in a life insurance dispute?
When an insurer isn’t sure who should receive the benefit due to conflicting claims or disputed paperwork, they may file an interpleader lawsuit. This allows a judge to decide the rightful recipient. We regularly represent clients in these cases.
Can a former spouse remain a beneficiary after divorce?
That depends on the state. Some states have automatic revocation laws that remove ex-spouses unless the insured reaffirmed the designation post-divorce. However, if the form was re-submitted or the law doesn’t apply, the ex-spouse may still be entitled to payment.
Does ERISA apply to disputes over unprocessed beneficiary changes?
Yes, if the life insurance policy was provided through an employer. ERISA governs the administration of benefits and imposes fiduciary duties on both the insurer and employer. Failure to process beneficiary changes correctly can lead to litigation under ERISA.
What kind of evidence helps win a life insurance beneficiary dispute?
Strong evidence includes a copy of the submitted form, delivery confirmation, email communications with the insurer, witness statements, and any other proof that shows the insured’s intent to make the change.
Can two people claim the same life insurance benefit?
Yes. This happens when a change was submitted but not processed, or when someone challenges a beneficiary on grounds of fraud, undue influence, or outdated designations. In these cases, insurers often pay no one until the court decides.
How much does your firm charge for handling life insurance disputes?
We work on a contingency fee basis, meaning we only get paid if we win your case. We offer free consultations to assess your situation and determine the best course of action.