Almost everyone who owns a life insurance policy has the power to change the policy beneficiaries whenever desired.  Furthermore, there is usually no need to notify the current beneficiary, nor is there any requirement for the current beneficiary to provide consent.  The only exception is if the current beneficiary is irrevocable.

How Insurance Companies Respond to Requests for Beneficiary Changes

Insurance companies review documents such as requests for beneficiary changes to determine if the changes were made in full compliance with the provisions of the policy.  If it is determined the change is compliant with the insurance company’s rules for altering beneficiaries, the insurer will modify the policy to include the changes.

Last-minute Beneficiary Changes

Beneficiary changes that occur in the last-minute are generally those applied in the days, weeks or months immediately before the death of the individual in question.  In some cases, the policyholder’s caretaker or relative alters the life insurance document either on their own or at the request of the insured. If you make a last-minute beneficiary change, there is a chance your family members or others involved in your life insurance policy will contest the change.

Last-minute alterations to life insurance beneficiaries have the potential to shock family members.  If certain family members are removed as beneficiaries just prior to death, he h or she might contest the change.  After all, there is a chance the individual who owns the policy is elderly, senile and/or influenced by others. Though every insurance company is unique, in the some of cases, witnesses are necessary for a change of beneficiary form to be valid.  These witnesses must be present at the time the form is signed. Furthermore, the change of beneficiary form has to comply with the policy’s nuanced written rules. Finally, the form must arrive at the insurance company’s office prior to the passing of the insured party.

The Issue of Invalid Forms

In some cases, the policyholder may submit a change of beneficiary form yet makes one or several mistakes when filling out the change of beneficiary form.  It is common practice for insurance companies to deny requests made on forms with mistakes as they are deemed incomplete. In most cases, invalid forms can make the difference between which party is paid.

Contesting Beneficiary Changes

Oftentimes, the initial beneficiary is unaware he or she has been removed as the beneficiary of the life insurance policy, which can lead to the original beneficiary and the new beneficiary both filing claims for the exact same benefits stemming from the policy.  If such a situation develops, the removed beneficiary may formally contest the change of beneficiary. Usually in such cases, the insurance company will then initiate a special legal proceeding called an “interpleader”. Through an interpleader action, the insurance company will ask a Court to make the decision as to which beneficiary should receive the money.  If you are made part of an interpleader action, you should contact an attorney specializing in life insurance matters immediately. Failure to timely and properly respond to an interpleader action can result in the court denying your claim for the life insurance proceeds.

The Question of Validity

One of the ways that the validity of a change of beneficiary can be challenged is attacking the mental capacity of the insured at the time the change was submitted.  Most states require that the owner of the policy must be capable of understanding what he or she is signing and the ramification of changing the beneficiary for the change of beneficiary to be valid.  If the policyholder is not of sound mind or if he or she is under duress or threatened to make the change, it will not be valid.

Both Sides in This Conflict Need the Assistance of a Seasoned Attorney

Whether you are attempting to ensure life insurance benefits are paid out as promised or if you are attempting to prove the last-minute policy alteration was not forced, you will need a skilled attorney on your side.  An attorney will help you compile evidence, prove fraud or combat charges of fraud and ultimately ensure the policy is paid to the appropriate parties. Our legal team is here for you regardless of whether you would like to contest or defend beneficiary changes.