Category: Life Insurance
Divorce Decree

Does a Divorce Decree Override a Named Beneficiary?

Sometimes. It depends upon what state and federal law controls the life insurance policy and whether the policyholder was married in a community property state or not.

Learn from the nation’s top life insurance lawyers how divorce may affect a life insurance beneficiary designation. If your spouse or ex spouse had life insurance and died and you believe you should be the beneficiary, call us to discuss your case. We have helped clients across the country get the life insurance payout they are entitled to.

Named Beneficiaries in Life Insurance

Under most circumstances, a named beneficiary receives the life insurance payout even if the policyholder’s will says otherwise. However, certain legal situations may change that. This situations include:

  • If the insured was married in a community property state
  • If the insured failed to change the beneficiary designation after divorce in a revocation upon divorce state
  • If the insured changed an irrevocable beneficiary designation
  • If the insured named someone other than the beneficiary designated by court order

If any of these apply to your spouse or ex spouse and you think you should be their life insurance beneficiary but are not, call us – we may be able to help you.

Who Becomes the Beneficiary of a Life Insurance Policy After a Divorce

The answer to this is, it depends.

Many states have revocation-upon-divorce laws that eliminate an ex spouse as a policyholder’s beneficiary automatically upon divorce. This means that a policyholder must designate someone else as the beneficiary. Otherwise there will be no named beneficiary if the policyholder dies, the death benefits may pay to the estate.

Can a Divorce Decree Override a Named Beneficiary?

Yes. If the policyholder was married in a community property state and got divorced, the ex spouse may be entitled to some of the death benefit regardless of who is the named beneficiary.

Also, if the policyholder is a child support or spousal support obligor, is under court order to name their support obligees as life insurance beneficiaries, and fails to do so, those support obligees may be entitled to the death benefit regardless of who is the named beneficiary.

In either of these cases, the people who believe they should be the named beneficiaries but are not must file an interpleader and contest the beneficiary designation. Beneficiary disputes are notoriously difficult to win. Call us for help if you need to dispute a beneficiary designation.

States that Revoke a Person’s Beneficiary Rights Following Divorce

As of this writing, the following states have some form of revocation-upon-divorce statute that automatically removes an ex spouse as life insurance beneficiary after divorce:

  • Alabama
  • Alaska
  • Arizona
  • Colorado
  • Florida
  • Hawaii
  • Idaho
  • Iowa
  • Massachusetts
  • Michigan
  • Minnesota
  • Montana
  • Nevada
  • New Jersey
  • New Mexico
  • New York
  • North Dakota
  • Ohio
  • Pennsylvania
  • South Carolina
  • South Dakota
  • Texas
  • Utah
  • Virginia
  • Washington
  • Wisconsin

A few states like California do not have revocation-upon-divorce statutes.

How Federal ERISA Law Treats Life Insurance and Divorce

Bear in mind that if the policyholder has group life insurance through their employer, that policy is governed by ERISA which supersedes state law. Under ERISA, a named beneficiary cannot be changed by the act of divorce. Therefore, if a policyholder lives in a revocation-upon-divorce state, names their spouse as their life insurance beneficiary, and then gets divorced, their ex spouse remains as their beneficiary.

If a policyholder does not wish their ex spouse to benefit from their death, they must update their group life insurance beneficiary themselves as any state revocation-upon-divorce law has no effect.

Re-Designating a Beneficiary Following Your Divorce

Many revocation-upon-divorce states specify a procedure to redesignate an ex-spouse as a life insurance beneficiary following divorce. 

Redesignation is common when the policyholder is a child support obligor or a spousal support obligor and is under court order to name their obligees as life insurance beneficiaries. Beneficiary redesignation ensures that the obligees’ income stream continues upon the policyholder’s death.

Rights to Life Insurance of Divorced Spouses

Someone may be entitled to a portion of their ex spouse’s death benefits even if they are not named as beneficiaries on the life insurance policy. 

In community property states, income earned during the marriage qualifies as community property – meaning, that income belongs to both spouses equally. If the policyholder paid some or all of their life insurance premiums with that income, their ex spouse may get a prorated portion of the life insurance payout even if someone else is the designated beneficiary.

Talk with an Experienced Life Insurance Lawyer

We have experience in every state in the nation, as well as with working under federal ERISA law, helping life insurance beneficiaries and those who are otherwise entitled to some of the death benefits get their due. Let us help you too. Call us today to discuss your case, free of charge.

Life insurance policy

Stranger Originated Life Insurance

Stranger originated life insurance is frequently pitched as a way for older individuals to get a tax-free payout. The arrangement may be called an “estate maximization plan,” a “no cost to the insured plan,” a “zero premium life insurance policy,” or a “new issue life settlement.” Whatever it is called, it requires committing insurance fraud.

If someone approaches you with a life insurance scheme that sounds like this, beware – STOLIs are for the most part illegal. And if you believed you should have been a beneficiary to a life insurance policy and some stranger was named instead, give the life insurance lawyers at Boonswang Law a call. We have helped clients nationwide get the payout they are due.

What Stranger Originated Life Insurance Is

Also called Stranger Owned Life Insurance or STOLI for short, Stranger Originated Life Insurance is a situation in which someone who does not have an insurable interest in the insured pays premiums on a life insurance policy in the name of the insured and is the policy’s beneficiary.

The Purpose of Stranger-Owned Life Insurance

The purpose of STOLIs is to get a tax-free payout. A third party may approach an insurable person and encourage them to apply for more life insurance coverage than their age, earning power, and assets would normally justify. That third party would then pay the premiums. The insured puts the policy into a trust once the contestability period expires and sells it to that third party for a “free” cash payment. That third party then gets a tax-free payout when the insured dies.

This sounds like win-win – the insured and the third party both get a tax-free payout. The losers are the IRS and the life insurance companies. While you may not have much sympathy for these entities, STOLIs contribute to higher taxes and higher premiums for the rest of us.

Is Stranger Originated Life Insurance Legal?

STOLIs are generally illegal but where they are not, they are at the very least unethical. Most are merely schemes to gain tax free money through fraudulent financial reporting.  

A third party can create an insurable interest in someone by loaning them money. If the insured died they would leave the loan unpaid, creating an insurable interest.

When Someone Can Take Out a Life Insurance Policy on Someone Else

Policy Owners Must Have an Insurable Interest in the Insured

Legally, someone must have an “insurable interest” in the insured in order to purchase a life insurance policy in their name and name themselves as beneficiary. 

The purchaser of a life insurance policy has an “insurable interest” in the insured when their finances would be adversely affected by the death of the insured. Some states set forth who has an insurable interest in the insured, such as a loving relationship, i.e., spouse, children, parents, or siblings.

The insurable interest requirement ensures that the policy owner/beneficiary has more than a financial interest in the insured. Presumably, someone in a loving relationship with the insured would hope for their long life as well as a death benefit when they die, not just their death so that they can get their payout.

An Employer May Have an Insurable Interest in an Employee

A corporation with an insurable interest in the insured may also own a life insurance policy in the insured’s name, called a corporate-owned life insurance (COLI) policy. COLIs generally require the consent of the insured.

For example, a company may insure a highly-experienced and valued employee so that they have the funds to hire a comparable replacement should that employee die. The insurable interest is the company’s interest in keeping that employee alive and working for them. 

Talk With an Experienced Life Insurance Lawyer

If you thought you were the beneficiary to a loved one’s life insurance policy but a stranger was named instead, call us. You may not get the death benefit after all if the insured committed insurance fraud, but if a stranger took advantage of the insured you may still get paid. 

We take cases on contingency only to minimize out-of-pocket expenses to you. Call us to discuss your case, free of charge!

life insurance lawyer

Life Insurance Conversion Privilege

Life Insurance Conversion Privilege

What is life insurance conversion privilege, and how does it affect policyholders and their beneficiaries? Find out from the life insurance lawyers at Boonswang Law, who have gotten beneficiary clients paid in every state in the nation when life insurance companies delay or deny claims for death benefits.

If the life insurance company denied your claim for death benefits due to lapse, termination, or failure to convert, call us. Often the lapse in coverage was no fault of the policyholder, and in those cases, we can get you paid. Call us to discuss your case, free of charge!

Life Insurance Conversion Privilege Definition

In general, “conversion privilege” in life insurance is a policyholder’s right to convert a life insurance policy from one type to another without submitting to a medical exam or completing a new application. Conversion privilege may also guarantee the amount the policyholder pays in premiums for coverage under the new life insurance policy. Some policies may also refer to this as a “guaranteed insurability option”.

Types of Life Insurance Conversions

Group to Individual Life Insurance

By far, the most common type of conversion carrying privilege is when an employee or former employee converts their group life insurance coverage through their employer to an individual policy. Conversion privilege guarantees individual coverage regardless of the policyholder’s health, and guarantees premium payments for a specified number of years.

Term to Permanent Life Insurance

Term life insurance is the least expensive insurance someone can purchase because it provides coverage for a set number of years, called the “term,” then expires. If a policyholder wishes to renew their coverage once the term expires, chances are that their premium payment will increase because they have aged and there is greater risk they will die within the policy term.

If a term life insurance policy carries conversion privilege, the policyholder has the option to convert the policy to permanent life insurance without submitting to a medical exam. This option allows a policyholder to maintain coverage even if they suffer health problems near the end of the term.

Conversion privilege in a term life insurance policy will likely have an expiration date, and once the policyholder converts to a permanent policy they will likely pay more in premiums. However, conversion privilege gives a policyholder with health problems the option of maintaining life insurance. If they had to apply for a new policy, their coverage might get denied due to their present health.

There are many types of permanent life insurance, but most commonly they are called “universal” or “whole” policies. 

Life Insurance Conversion Privilege Requirements

In order to convert a life insurance policy, the policyholder must strictly adhere to the terms of the provision in the policy itself. This provision will set forth the required documents, timeline, and due date, which will vary among policies.

If a policyholder fails to comply with the requirements set forth in the conversion privilege provision, they risk losing life insurance coverage. This might be a problem if the policyholder does not have multiple life insurance policies, but chances are the policyholder purchased this coverage for a reason, and unless that reason dissipated, they must carefully follow directions to convert their policy effectively.

Employer Obligations Concerning Life Insurance Conversions

Providing a Policy to the Insured

Federal ERISA law governs employer-provided group life insurance coverage, whether entirely subsidized by the employer or paid in part by the employee. Under ERISA, an employer must provide covered employees with a copy of the policy itself and inform them of the right to purchase accidental death and dismemberment coverage (AD&D coverage) as a rider.

Inform Insured of Conversion & Portability Rights

An employer has a duty to tell a covered employee of their right to continue coverage should they leave employment, and how to do so, in writing. They also must inform them of their right to apply for a waiver of life insurance premium for disability, if they become disabled.

Provide Information on Policy Changes

If any aspect of life insurance coverage changes, the employer must provide notice of that change in writing to all coverage employees.

Should You Convert Your Life Insurance?

Whether you are seeking to convert employer-provided group life insurance coverage to an individual policy, or someone holding a term life insurance policy who is considering converting to a permanent life insurance policy, there are several aspects of coverage to weigh in making your decision.

First, do you need life insurance after you leave your job or your term life insurance coverage expires? If you do, you will either need to convert your existing life insurance coverage or purchase a new policy.

Second, consider whether you will pay less in premiums when you convert than if you should purchase new coverage. This will require some research on your part. Factors such as your current age and health will affect the relative cost of each option.

Last, consider whether the needs of your beneficiaries will be best met by converting your policy or by purchasing new coverage. What are their needs? Is there an end date to those needs or are they continuing? How old is your beneficiary and what is the likelihood they will predecease you? All of these questions must be answered and weighed before you make a decision to convert an existing policy or to purchase new coverage.

Life Insurance Conversion vs Portability

If group life insurance coverage is “portable” an employee can take this coverage with them when they leave employment, and simply pay their employer the premiums. This option is usually available to employees who are younger than 69 and not leaving their employer due to illness, injury, or retirement. Most “ported” group life insurance will cover a former employee until age 70. 

Portability may be a more cost-effective option than conversion for an employee seeking to leave work but maintain life insurance coverage. The employee should compare the cost of premiums, the breadth of coverage, and whether they will need coverage past age 70 in making this decision.

Failing to Convert Your Life Insurance Policy

If a policyholder fails to convert their life insurance policy before the required deadline in term life insurance, or before the date provided in the conversion packet provided by their employer, life insurance coverage will lapse and terminate. This means that the life insurance company will deny a claim for death benefits due to lapse. However, there still may be something that can be done.

Talk with an Experienced Life Insurance Lawyer

Unfortunately, many policyholders and employees get faulty advice from their agent or their employer and fail to effectively convert their policy as they intended. If the failure to convert was no fault of the policyholder or employee, their beneficiaries may still get a payout.

If your claim was denied due to lapse caused by failure to convert, talk with the life insurance lawyers at Boonswang Law. We investigate the cause of the lapse and if the policy would have converted but for the failure of an agent or employer to adhere to their legal requirements, we can get you paid. Call us at (855) 553-9010 to discuss your case with us, free of charge.

Can You Have Multiple Life Insurance Policies?

Can You Have Multiple Life Insurance Policies?

Yes, you may purchase multiple life insurance policies. Many people who purchase life insurance purchase multiple policies for different reasons. Learn from the life insurance lawyers at Boonswang Law about the types of life insurance policies available, the reasons for owning multiple life insurance policies, why the amount of life insurance you own can be limited, and what alternatives you have to owning multiple policies.

Owning Multiple Life Insurance Policies

When you own more than one life insurance policy, you must complete separate applications and medical questionnaires for each policy. Be sure that the information you provide is accurate and consistent across all policies. If it is not, you risk an allegation of life insurance misrepresentation and the chance your beneficiary or beneficiaries do not get their payout.

Be sure to organize your policies so that you know when premiums come due, and pay them in full and on time. If you miss a premium payment, you risk life insurance lapse and termination, and again, the life insurance company will deny your beneficiaries’ claims. Lapse is one of the most common reasons life insurance companies deny claims for death benefits.

Reasons to Have Multiple Policies

Common reasons to have more than one life insurance policy include:

Limits On Your Life Insurance Amount

The amount of coverage you can purchase will be limited by factors such as your age, health, occupation, and net worth. For example, someone who works at minimum wage and is 65 years old will not be able to purchase a $1,000,000 policy.

When you apply for an additional policy, the life insurance company takes into consideration the amount of coverage you already have when determining the amount of coverage they will offer you.

Differences in Life Insurance Policies

These are the various types of life insurance:

Term Life Insurance

This is the most common type of life insurance. Someone purchases a set amount of coverage for a term, say, 10 or 25 years, and if they die within the policy term their beneficiary or beneficiaries receive the face amount of the policy as a death benefit.

Whole Life Insurance

Whole life insurance can work like term life insurance as far as payouts to beneficiaries goes, but unlike term life, whole life accrues cash value as the insured pays premiums. The insured can borrow against that cash value subject to some restrictions.

Group Life Insurance Through an Employer

Employers often offer life insurance coverage to their employees at no or little cost, as a benefit to employment. The amount of coverage will likely be a multiple of the employee’s annual salary. If the employee leaves their job, they have the option of converting their coverage to an individual policy.

Funeral Expense Insurance

These types of policies typically are inexpensive and have a face value of $10,000 or $15,000. Funeral Expense policies pay end-of-life and funeral expenses.

Multiple Life Insurance Policies Alternatives

Instead of purchasing more than one life insurance policy, one might consider naming a  beneficiary to their savings account, checking account, investment account, retirement account, or pension. For example, someone who has purchased the maximum amount of life insurance coverage they are eligible for should consider these alternatives when planning to provide for loved ones should they die.

How An Experienced Life Insurance Lawyer Helps

If you own multiple life insurance policies, you must organize this documentation so that when you die your beneficiaries will be able to access and understand the coverage you have.

If you struggle to understand multiple life insurance policy coverage, call us. Our experienced life insurance lawyers have helped beneficiaries across the country understand their rights and get the benefits they deserve. Call 1-855-347-1279 today to discuss your case – free of charge!

Can You Sue for Life Insurance Proceeds?

The answer is yes. There are four circumstances under which you can file a lawsuit to collect life insurance death benefits. 

  1. The life insurance company is unreasonably delaying payment of your claim for death benefits. 
  2. The life insurance denied your claim for death benefits.  
  3. There is a beneficiary dispute. 
  4. A creditor can sue someone to collect on a debt, obtain a money judgment, and collect from the life insurance proceeds the debtor received if state law allows. For example, Florida life insurance laws prohibit creditor collection on life insurance proceeds.

This article will explain the three scenarios that warrant a lawsuit against the life insurance company. If your claim for death benefits was denied or is being delayed for no good reason, or if you want to contest a beneficiary designation, call the experienced life insurance lawyers at Boonswang Law to discuss your case, free of charge. You don’t have to fight the life insurance companies alone!

How to Sue if the Life Insurance Company is Unreasonably Delaying or Denied Payment of Your Claim

If 30 days have passed since you filed your claim for death benefits and you have not heard from the life insurance company, or the life insurance company tells you they are still investigating, or the life insurance company denied your claim, it is time to discuss your case with an experienced life insurance lawyer.

Why do you need to work with a life insurance attorney? Because life insurance companies operate like any other business – to make a profit. To this end, life insurance companies seek to collect more in premium payments than they pay out in claims for death benefits. In other words, their quest for profits puts their interests in conflict with the interests of the insured and your interests as beneficiary.

Life insurance companies employ teams of attorneys to justify delaying and denying what are later determined to be valid life insurance claims. To level the playing field, you need your own experienced legal representation if your claim is not paid within 30 days. And if the delay in paying your claim was unreasonable, you may be entitled to interest on the death benefits!

Steps to Take When Your Life Insurance Claim is Delayed or Denied

  1. Collect all correspondence from the life insurance company regarding your claim, as well as a copy of your completed and filed claim form and the policy itself, if available.
  2. Consult with an experienced life insurance attorney, who will assess your case free of charge. Reputable life insurance lawyers take cases on contingency, meaning that they do not get paid unless you do.
  3. Let your life insurance lawyer negotiate with the life insurance company to get your payout. Our team has been able to settle many cases and get our beneficiary clients paid at this stage. Call us at 1-855-397-6236 for immediate help.
  4. If the life insurance company will not pay, your life insurance attorney will draft and file a complaint against them under the laws of your state, and advocate for you in court.

State law varies as to how to dispute a delayed or denied life insurance claim. Rest assured that our team of life insurance lawyers has experience in every state in the nation. We can efficiently and effectively employ your state’s legal process to get you paid, if and when negotiations with the life insurance company fail. Call us for your free, no-obligation consultation.

How to File a Life Insurance Beneficiary Dispute

There are several circumstances under which you may want to contest a life insurance beneficiary designation. In these cases we will represent you in what is called an interpleader, and the life insurance company will delay paying death benefits until a court resolves the beneficiary dispute.

The Life Insurance Beneficiary Designation Changed at the Last Minute

Are you suspicious of a last-minute beneficiary change from you to someone else? Perhaps you suspect that the insured changed the beneficiary designation under duress, or perhaps was not of sound mind when they made the change.

If you are the former named beneficiary, you have standing to file suit. Be advised that it is very difficult to prove that someone, perhaps a relative, romantic partner, or caregiver, pressured the insured to change the beneficiary designation to themselves. It is also difficult to prove that the insured lacked the capacity to make the change.

Call us for help if you suspect the insured changed beneficiary designation from you to someone else under duress or lacking the capacity to do so. We will assess your case free of charge.

The Life Insurance Beneficiary Designation Changed After the Death of the Insured

A life insurance beneficiary designation cannot be changed after the death of the insured, for any reason. Only the insured has the power to make changes to their life insurance policy.

If the date of the change in life insurance beneficiary designation is after the insured’s date of death, that change is fraudulent. If you are the formerly-named beneficiary, call our experienced life insurance fraud lawyers for help getting the death benefits the insured intended you receive.

The Life Insurance Beneficiary Designation Changed Contrary to Court Order

Many child support and spousal support obligors are under court order to name the obligees as beneficiaries to their life insurance policy. If the insured changed the beneficiary designation to someone other than the support obligees contrary to court order, the obligees have standing to file a beneficiary dispute.

State law varies as to how this change in beneficiary designation is treated, especially in community property states where the insured was married and changed the beneficiary designation to their spouse. Our life insurance lawyers have extensive experience unraveling the complex web of laws and regulations governing beneficiary designations in each state. Contact us for help – free of charge.

The Insured Had Group Life Insurance

Many states have revocation-upon-divorce statutes, which revoke an ex-spouse’s life insurance beneficiary designation automatically. However, if the insured had group life insurance, the beneficiary designation is controlled by a federal law called ERISA which overrides state law and an ex-spouse can remain the named life insurance beneficiary. 

This gets even more complicated in community property states, where spouses and ex-spouses may be entitled to some or all of the death benefits in certain circumstances. Call us for help if you are a spouse or an ex-spouse grappling with this situation. 

Call Boonswang Law for Help with Your Life Insurance Lawsuit

Whether you are a named beneficiary struggling to get your life insurance claim paid, or you are a former beneficiary and believe you should still receive the death benefits, we can help. We have helped life insurance beneficiaries nationwide get the death benefits they deserve. Call us at 1-855-898-4158 to discuss your case. Our goal is to get you paid!

Life insurance lawyer meeting with client

Life Insurance Beneficiary Rules for Spouses and Ex-Spouses After Divorce

Current spouses and often ex-spouses are often named life insurance beneficiaries by an insured. However, when they are not, there are circumstances under which they are still entitled to some or all of the death benefit.

If your spouse or ex-spouse died, had life insurance, and did not name you as beneficiary, you may still have a right to some or all of the death benefit depending upon the circumstances. 

If you are an ex-spouse and your life insurance claim was denied, you may still be paid. If your spouse or ex-spouse named you as beneficiary and someone is disputing that, you may still be paid.

Whether you are the named beneficiary or believe you should be, call us for your free, no-obligation case evaluation. Our life insurance claim attorneys help people in your position get paid the life insurance death benefits to which they are entitled by law. 

In Community Property States, a Spouse is Entitled to Life Insurance Regardless of Who is Named Beneficiary

Can a spouse override a beneficiary on a life insurance policy? Sometimes. It depends on where you live.

Most states are “equitable distribution” or “equitable property” states in which spouses who divorce are not automatically entitled to a 50-50 split of marital property. Instead, marital assets are divided “equitably,” meaning fair but not necessarily equal.

In the nine so-called “community property” states, each spouse is entitled to 50% of the marital property. This means that if an insured paid life insurance premiums with income earned during the marriage, their spouse is entitled to one-half of the death benefit regardless of who is named as the beneficiary on the policy.

The community property states in the U.S. are:

  • Arizona
  • California 
  • Idaho 
  • Louisiana 
  • Nevada
  • New Mexico
  • Texas
  • Washington 
  • Wisconsin

Alaska is called an “opt-in” state because it is an equitable property state but has a law allowing couples to choose community property rules. They do this by executing a legally-binding community property agreement or a community property trust. Couples may enter into community property agreements or trusts either before or during their marriage.

How to Exclude a Spouse as Life Insurance Beneficiary 

In community property states, spouses can execute a “property status agreement” that gives them the legal, binding ability to exclude their life insurance from marital property and effectively name someone other than their spouse as beneficiary. In this case, the spouse or former spouse of the insured will have no right to the death benefit if they are not named as beneficiary.

In equitable distribution states, a policyholder who is married can name whomever he wants as his life insurance beneficiary. However, if the insured is under court order to maintain life insurance to protect child support, spousal support or alimony, he must name his former spouse, the support obligee, as beneficiary. If he does not, his policy will likely be the subject of a beneficiary dispute in which the support obligee will likely prevail.

When it is Necessary to Keep an Ex-Spouse As Your Beneficiary

Does a Divorce Decree Override a Named Beneficiary in Life Insurance? Yes!

There are circumstances under which an insured must name their former spouse as beneficiary to their life insurance policy. This is generally done to protect spousal support or alimony, child support, or pension or retirement funds, and is ordered by a family law judge as part of the property settlement agreement during divorce proceedings. 

If the support obligor (payor) fails to maintain life insurance, the court frequently allows the support obligee (recipient) to maintain life insurance on the ex-spouse and adds the premium payment to the amount the obligor pays.

If an insured fails to comply with the court order and names someone other than the former spouse as beneficiary, the ex-spouse may have grounds for a beneficiary dispute. If you are in this position, call us:  we can help you get paid.

The Danger of Failing to Update the Beneficiary in Case of Divorce

Half of all states have “revocation-upon-divorce” statutes that automatically revoke an ex-spouse’s designation as life insurance beneficiary upon divorce. The states that have revocation-upon-divorce statutes are:

  • Alabama
  • Alaska
  • Arizona
  • Colorado
  • Florida
  • Hawaii
  • Idaho
  • Iowa
  • Massachusetts
  • Michigan
  • Minnesota
  • Montana
  • Nevada
  • New Jersey
  • New Mexico
  • New York
  • North Dakota
  • Ohio
  • Pennsylvania
  • South Carolina
  • South Dakota
  • Texas
  • Utah
  • Virginia
  • Washington
  • Wisconsin

Note that a 2018 Supreme Court decision captioned Sveen v. Melin held that it is constitutional to retroactively apply a revocation-upon-divorce statute to exclude a former spouse as beneficiary, where the insured purchased the policy four years before the statute was enacted.

When Life Insurance is Ordered to Protect Support Payments or Pension/Retirement Proceeds

In states that have automatic revocation, an insured can comply with a court order to name a support obligee as beneficiary by completing a new beneficiary designation form following the divorce redesignating the former spouse as beneficiary.

It is Important to Update Your Beneficiary Designation After Divorce

Not every state has an “automatic revocation” statute. If you live in one of those states, you should still update your life insurance to reflect your current wishes. Few divorced people want their ex to receive a windfall upon their death!

How to Find Out if Your Spouse or Ex-Spouse Had Life Insurance

An insured should always inform their beneficiaries that they have a life insurance policy, but if the insured failed to do so and you suspect there was a policy in effect, do the following:

  • Ask Employers & Financial Professionals 
  • Check Old Bills and Mail for Premium Payments
  • Review Tax Returns for Evidence of Premium Payments
  • Contact Your State’s Insurance Department for Information

If Your Spouse or Ex-Spouse Had a Life Insurance Policy and You are Not the Named Beneficiary, Call Us

Our life insurance lawyers have helped spouses and ex-spouses in every state get the life insurance proceeds to which they are entitled, regardless of who is named as beneficiary. We know how the law works in your state, and we can help you, too. Contact us to schedule your free consultation today.

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Why Would a Life Insurance Policy Need Probate Papers?

Does a Life Insurance Policy have to go through Probate?

Generally speaking, no.

Usually, life insurance death benefits are paid out directly from the insurer to the beneficiary or beneficiaries without going through probate. Life insurance is not part of the insured’s estate and is not subject to debt collection, payment of the insured’s bills, or taxation as inheritance.

However, there are circumstances under which the death benefit from a life insurance policy is transferred to the insured’s estate rather than to a beneficiary. Under these circumstances, the life insurance proceeds will be subject to the probate process.

Having trouble with your life insurance claim because of a vague, invalid, or out-of-date beneficiary designation? Are you an ex-spouse entitled to the life insurance death benefit? Do you think you should be the beneficiary of an employer-provided life insurance policy? Call us for your free, no-obligation case evaluation.

Are life insurance proceeds considered part of an estate?

No. Life insurance death benefits pass to beneficiaries by operation of state law, not through the insured’s estate. Are life insurance proceeds public record? No.

How do life insurance proceeds end up in the decedent’s estate?

When is Life Insurance Part of the Estate?

When there is an invalid or out-of-date beneficiary designation, or the designated life insurance beneficiary is deceased or cannot be found, the life insurance company pays the death benefit to the estate of the insured.

What happens when life insurance goes to the estate?

When there is no beneficiary on a life insurance policy, the life insurance beneficiary rules dictate that the death benefit will be subject to the probate process.

“Probate” refers to the process by which a deceased individual’s estate is distributed. The executor uses the deceased’s will to determine who are the beneficiaries entitled to a portion of the insured’s estate. If the deceased had no will, the estate is distributed according to the state’s laws of intestacy.

Unlike the process of claiming the death benefit as a beneficiary, which is streamlined and private, the probate process varies greatly state-to-state basis and is a matter of public record. And especially in the case of high-value estates, probate can be a heavily-litigated process, with multiple parties claiming conflicting amounts of the deceased’s assets.

Is the beneficiary of life insurance responsible for debt? Can life insurance proceeds be taken by creditors?

No, and this is one of the reasons going through probate is disadvantageous even if the estate value ends up being distributed appropriately.

If the insured was in debt at the time of death, their estate will first be used to pay off any outstanding debts. When the remains of the estate is distributed to the insured’s heirs, those proceeds may be subject to estate taxes. In contrast, if a beneficiary receives the insured’s death benefit directly from the insurance company, the beneficiary will receive the full amount without debt collection or tax collection.

Many states exempt a specified amount of life insurance death benefits (e.g. up to $50,000) from debt and/or tax collection even after the death benefits are transferred to the insured’s estate, but this depends on the laws in your state.

How an Insured Can Avoid Leaving the Death Benefit to Their Estate

It is in everyone’s best interests that an insured keep their beneficiary designations as up-to-date as possible to avoid probate, debt collection, creating a public record, and possible estate tax.

Designating multiple life insurance beneficiaries such as more than one primary beneficiary or a secondary or contingent beneficiary can provide an effective safeguard in case something happens to a primary beneficiary.

National Beneficiary Lawyer to Help You With Your Life Insurance Claim

Unfortunately, when there is a vague, invalid, or out-of-date beneficiary designation, or if the named beneficiary is deceased, there is frequently litigation over who is rightfully entitled to the policy’s death benefit. This litigation is called a life insurance beneficiary dispute. If the court determines that none of the litigants are rightful beneficiaries, the death benefit goes to the insured’s estate.

If you believe your life insurance claim has been wrongfully denied or that you are entitled to a death benefit that seems to be going to the estate instead, you need the advice of an experienced life insurance beneficiary lawyer. Call us – we get our clients paid!

Quick Tips for Buying Life Insurance (video)

The terms of your policy could be life-altering for your loved ones.

Insurance is something of a mystery to many of us.  What are the different kinds of coverage out there?  How much coverage do you need?

This video gives a few good rules of thumb:

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