Yes. A life insurance beneficiary designation can be challenged, but only under specific legal grounds. Courts do not overturn beneficiary designations lightly, because life insurance is a contract and insurers are generally required to pay the person named on the policy. That said, there are well-recognized situations where a designation can be invalidated.
Below is a clear explanation of when a challenge is possible, what must be proven, and how these disputes are resolved. When you are facing a beneficiary dispute, we are here for you. Look at our beneficiary dispute fact sheet for more information.
Valid Legal Grounds to Challenge a Beneficiary Designation
Fraud
A beneficiary designation may be invalid if it was obtained through fraud. This happens when someone intentionally deceives the policyholder or the insurance company to be named as beneficiary.
Examples include:
Forging a beneficiary change form
Misrepresenting identity or relationship
Submitting false documents without the insured’s knowledge
If fraud is proven, courts can disregard the designation and redirect the proceeds.
Duress
Duress exists when the policyholder was forced or threatened into naming or changing a beneficiary.
Common situations include:
Threats of physical harm
Threats to withhold care or housing
Extreme pressure at the end of life
If the designation was not made voluntarily, it may be set aside.
Undue Influence
Undue influence is one of the most common grounds for beneficiary challenges, especially involving elderly or vulnerable insureds.
Courts look for:
A confidential or dependent relationship
Isolation of the insured
Sudden changes that contradict long-standing plans
A beneficiary who actively controlled finances or medical care
Caregivers, new romantic partners, and dominant family members are frequent subjects of undue influence claims.
Lack of Mental Capacity
A beneficiary designation can be challenged if the insured lacked the mental capacity to understand what they were doing at the time of the change.
Relevant evidence may include:
Dementia or Alzheimer’s diagnoses
Medical records showing cognitive impairment
Heavy medication or terminal illness
Witness testimony about confusion or disorientation
The key issue is whether the insured understood:
What a beneficiary designation was
Who would receive the money
The consequences of the change
Mistake or Administrative Error
Sometimes the designation does not reflect the insured’s true intent due to error.
Examples:
Wrong person named due to similar names
Incomplete or improperly processed change forms
Employer or insurer failure to update records
Clerical or data entry mistakes
These cases often involve disputes between an intended beneficiary and the person listed on the policy.
Divorce, Court Orders, and Legal Disqualifications
A beneficiary designation may also be challenged when:
A divorce decree required a different beneficiary
A former spouse was not legally removed
A beneficiary is barred under a slayer statute
A court order or trust controls the proceeds
These challenges depend heavily on state law and whether ERISA applies.
How These Disputes Are Resolved
When a beneficiary designation is contested, insurers often:
Freeze payment
File an interpleader action
Deposit the money with the court
Let a judge decide who is entitled to the proceeds
Courts evaluate:
Evidence of intent
Medical and financial records
Witness testimony
Timing and circumstances of the change
The outcome may result in:
Full payment to a different beneficiary
Division of proceeds
Enforcement of the original designation
Important Limits to Beneficiary Challenges
Not every unfair situation creates a valid legal challenge.
Courts generally will not invalidate a designation simply because:
The decision seems unwise
Family members are disappointed
The insured changed their mind late in life
The beneficiary relationship was unpopular
There must be legal proof, not just suspicion or moral arguments.
Bottom Line
Yes, you can challenge the validity of a life insurance beneficiary designation, but only under defined legal grounds such as fraud, duress, undue influence, lack of capacity, mistake, or conflicting legal obligations.
These cases are evidence-driven and fact-specific. Many successful challenges involve insurer errors, caregiver influence, late-life changes, or ignored court orders.