Beneficiary disputes are one of the most common reasons accidental death insurance claims become delayed or contested. These disputes frequently arise when an insured person remarries but never updates the beneficiary designation on an employer provided life insurance or AD&D policy.
In one case handled by our firm, a Lincoln Financial AD&D claim became contested between an ex-spouse and a current spouse after the insured died in an accident. The dispute delayed payment of the accidental death benefit until the claim was ultimately resolved.
Attorney Christian Lassen focuses exclusively on life insurance and accidental death disputes nationwide.
The Accidental Death and Claim
The insured died in an accident covered by an AD&D policy issued by Lincoln Financial through an employer benefit plan. After the death, the beneficiary submitted a claim for the accidental death benefit.
During the claim review process, Lincoln Financial discovered that the beneficiary designation on file named the insured’s former spouse.
However, the insured had since remarried. The current spouse believed the proceeds should be paid to them instead.
This conflict created a beneficiary dispute that prevented the insurer from immediately paying the claim.
Why Ex-Spouse Beneficiary Disputes Occur
Life insurance and AD&D policies often remain in force for many years. When major life events occur, such as divorce or remarriage, policyholders sometimes forget to update the beneficiary designation.
This can create a situation where:
The ex-spouse remains listed as the beneficiary
The insured has remarried
The current spouse assumes the policy was updated
No new beneficiary form was submitted
When the insured dies without updating the designation, both individuals may claim the policy proceeds.
Divorce and Beneficiary Designations
Whether an ex-spouse can receive the life insurance proceeds often depends on several factors.
These may include:
The language of the policy
State laws governing beneficiary designations
Any divorce decree addressing life insurance
Whether the insured submitted a new designation after the divorce
In some situations, a divorce order may require the insured to maintain life insurance for a particular beneficiary. In other cases, the beneficiary designation remains unchanged simply because the insured never updated the form.
How Insurers Handle Competing Claims
When two people claim the same policy proceeds, the insurer may decline to decide who should receive the benefit.
Instead, the insurer may:
Delay payment while investigating the competing claims
Request additional documentation from both parties
File an interpleader lawsuit asking a court to decide
In an interpleader case, the insurer deposits the policy proceeds with the court and allows a judge to determine the rightful beneficiary.
Evidence Reviewed in Beneficiary Disputes
When courts evaluate disputes between a current spouse and an ex-spouse, several types of evidence may become important.
These may include:
The beneficiary designation form
Divorce decree or settlement agreement
Employer benefit records
Insurance enrollment documents
Communications from the insured regarding beneficiary changes
These records help determine who the insured intended to receive the accidental death benefit.
Resolution of the Lincoln Financial AD&D Claim
After the competing claims were evaluated and the circumstances surrounding the beneficiary designation were reviewed, the Lincoln Financial AD&D claim was ultimately resolved.
Beneficiary disputes involving former spouses and current spouses are among the most common issues that delay accidental death insurance claims.
Why Beneficiary Forms Should Be Updated
Many life insurance disputes occur because beneficiary designations are never updated after major life events.
Important events that often require updating a beneficiary designation include:
Marriage
Divorce
Birth of children
Estate planning changes
Employment changes involving group coverage
Keeping beneficiary forms current can prevent disputes and delays after a claim is filed.
Legal Help With Beneficiary Disputes
Beneficiary disputes can delay life insurance and AD&D claims for months or even years. These cases often involve complicated issues related to divorce orders, beneficiary forms, and competing claims.
The Lassen Law Firm focuses exclusively on life insurance disputes nationwide. Attorney Christian Lassen has more than 25 years of experience representing beneficiaries in contested life insurance and accidental death claims.
If a life insurance or AD&D claim is delayed because of a dispute between a spouse and an ex-spouse, legal review may help determine how the claim should be resolved.