Contesting life insurance beneficiary: Proofs that you need

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PostPosted: Fri Sep 16, 2011 9:21 pm   Post subject: Contesting life insurance beneficiary: Proofs that you need  

My father recently passed i was informed that I was beneficiary on one policy. The other policy he had the beneficiary as my mother who is actually his ex wife. His current wife contested the policy, sent in a divorce decree and the life insurance company told he that she was denied. She is now contesting again and the life insurance company told her that there is nothing they can do because all they have record of is his ex wife's name as the bene. Along with the divorce decree she sent in copies of form that my father filled out splitting up the life insurance in different percentages between herself and all of us kids but he did the forms wrong the percentages were not right. She told me that if she is to get the money then none of us kids are getting anything! Is there ANYTHING SHE CAN SUBMIT to over turn the life insurance company's denied decision?


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bangerang236
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PostPosted: Sat Sep 17, 2011 1:21 am   Post subject:   

That's what lawyers are for...



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PostPosted: Sat Sep 17, 2011 5:40 pm   Post subject:   

Ok...umm...

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PostPosted: Mon Sep 19, 2011 3:52 am   Post subject:   

I don't think she can do much.

Were the change of beneficiary forms submitted to the insurance company? if not then I really don't think the insurer is going to change anything after the death of the policy holder just because your step mom wants so. she can definitely fight it but chances of her wining are slim.


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PostPosted: Tue Sep 20, 2011 6:48 am   Post subject:   

Quote:
Along with the divorce decree she sent in copies of form that my father filled out splitting up the life insurance in different percentages between herself and all of us kids but he did the forms wrong the percentages were not right.


This is meaningless unless the "form" was the insurance company's change of beneficiary form and it was submitted to the insurance company before your father's death. If the "percentages were not right", the insurance company would not have accepted the change of beneficiary (as being defective) and would have returned the form to your father for his corrections.



Life insurance money cannot be designated or distributed to beneficiaries by the insurance company through any other means than a valid beneficiary statement. It cannot be done through a will or other document.



And in about 15 or 16 states, an ex-spouse is automatically disqualified as the beneficiary of his/her ex's life insurance upon the issuance of the divorce. But this does not eliminate the policyowner's right to (re)name a beneficiary.


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PostPosted: Tue Sep 20, 2011 7:00 pm   Post subject: Life ins contested  

My mom passed months ago left my brother and I beneficiaries. Changed from my dad who passed prior.

Mom also changed will and left my brother and I executors as well as heirs to estate. Three other siblings disinherited. Will being contested. Ins agent Life is being deposed. If I ever spoke to him via telephone on moms behalf. But the remainder of correspondence was done between the two mom and agent. What is the likelihood

Of this having anything to do with will. Mom knew her agent for many years, and they spoke often.

Please let me know your thoughts?


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PostPosted: Tue Sep 20, 2011 8:53 pm   Post subject:   

Your post is very cryptic and hard to follow. But life insurance beneficiaries are a matter of contract between the insured/owner and the insurance company, not a matter for the probate court -- unless there is no named beneficiary.



If your mother named you and your brother as beneficiaries, that's a done deal, and the money will be paid to the two of you without recourse by any other person.



As far as the estate is concerned, if probate court is involved, the decisions about property and other things (debts, etc) left behind by your mother will be made by the court in relation to the petitions submitted.



The court tries not to overturn wills and trusts unless there is clear and compelling evidence of fraud, coercion, or some other nasty business. So if there is no proof of that, the disinherited siblings will likely remain disinherited. However, you and your brother will probably need legal counsel to represent your side of the story.



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PostPosted: Tue Sep 20, 2011 10:04 pm   Post subject: Contesting life insurance benifcary  

MAX HERR.....



Quote:
This is meaningless unless the "form" was the insurance company's change of beneficiary form and it was submitted to the insurance company before your father's death. If the "percentages were not right", the insurance company would not have accepted the change of beneficiary (as being defective) and would have returned the form to your father for his corrections.




The form he filled out was from the life insurance company. He filled it out wrong for the simple fact that he had the percentages all wrong they did not equal 100% They then sent him a letter stating that he filled it out wrong and to redo it. He then started filling out another form in which he never filled out all the way and never signed nor turned in.The first one he filled out he signed and sent in but he did it wrong! My question is now that my stepmother has an attorney and is fighting the claim..will the form he submitted (Which was done wrong and cleared as DEFECTIVE) hold any water? Also, This case is in Michigan and you stated that by law the EX is automatically disqualified. Even though she is disqualified but my father still has her on as a primary bene does that trump her being disqualified?
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PostPosted: Tue Sep 20, 2011 11:45 pm   Post subject:   

Quote:
will the form he submitted (Which was done wrong and cleared as DEFECTIVE) hold any water?


Highly unlikely. Unless and until the insurance company receives a properly filled form, no changes will be made. If the insured has now died, the form cannot be submitted after-the-fact.



Quote:
you stated that by law the EX is automatically disqualified


You misread my post. This is now true only in about 20 states. But, Michigan is one of those states that does automatically disqualify the divorced spouse as beneficiary at the moment the divorce is finalized. This is true even if the beneficiary statement is not changed after the divorce.



The policyowner may RENAME his/her ex-spouse as the "new" beneficiary after the divorce, but a failure to do this leaves the ex- separated from the life insurance money, too.


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PostPosted: Wed Sep 21, 2011 3:11 am   Post subject:   

Max... Ok well if Michigan is one of the states that automatically disqualifies the exwife then why would the insurance company DENY the current spouse on her claim? I spoke with several people at this insurance company and they all told me that they reviewed both change of bene forms and the divorce decree and their ruling after reviewing all of these items was that the current spouse was DENIED. They did inform me that under the ERISA act the spouse had the right to appeal in which she is doing now with an attorney. So if the change of bene form was filed out in correctly and my father is now deceased and my mother (the ex wife) is disqualified ...where does the money go? I am the contingent bene on this policy...would it go to me?

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PostPosted: Wed Sep 21, 2011 7:24 am   Post subject:   

I'm sure MaxHerr will shortly provide the correct information needed by you.



Meanwhile, as I can think of, you may not receive the proceeds. As your mom and your dad's second wife, both are alive.



If the insurance company chooses not to give the benefits to the current spouse, it'll go to your mother.



On the other hand, if the current spouse does win the case, which I doubt she will (I may not be correct), then obviously it'll go to her.



In both the cases, the chances of the benefits going to you are very slim.

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PostPosted: Wed Sep 21, 2011 12:11 pm   Post subject:   

Quote:
why would the insurance company DENY the current spouse on her claim?


Simple. Insurance companies do not pay death claims to persons not named as a beneficiary. In this case, everyone can see the turmoil caused by not properly completing the requirements to change a beneficiary.



Although some insurance companies will accept a written statement as a change of beneficiary, most insurance companies have their own specific form for naming/changing beneficiaries after the policy is in force. Typical policy language states something like: " . . . in a form acceptable to us." By this, the insurance company normally means "our form".



[ From an earlier post ]

Quote:
He filled it out wrong for the simple fact that he had the percentages all wrong they did not equal 100% They then sent him a letter stating that he filled it out wrong and to redo it. He then started filling out another form in which he never filled out all the way and never signed nor turned in.


Failure to use this form, or to fill out the form properly -- as was the case here, plugging in numbers that did not add to 100% -- forces the insurance company to disallow the change the owner/insured intended. Failure to sign the form is another common reason for the insurance company not to accept it. Until it is done correctly, signed, and submitted prior to the insured's death, nothing changes, and the existing beneficiary statement remains in force.



Except that in this case state law automatically disqualifies an ex-spouse as the beneficiary.



Quote:
They did inform me that under the ERISA act the spouse had the right to appeal


Well, this is new information. Was the life insurance provided as an employee benefit? You haven't mentioned this before.



However, it makes a difference. Although ERISA provides uniform (non-discriminatory) protections to employees as far as access to and participation in employer-sponsored benefit plans, including life insurance, the matter of life insurance beneficiaries may still be controlled under state laws.



The US Supreme Court has ruled on this very issue of spousal disqualification, and allows the "plan document" to control -- if state law impermissibly interferes with ERISA, then ERISA preempts state law and the plan document controls. I don't know why an attorney would raise false hopes by filing an "ERISA Appeal" on behalf of the current spouse -- it will likely go nowhere, but still cost someone money . . . all the while filling the attorney's pocket. [[ My advice to the spouse using the attorney would be to not pay. Let the attorney sue for non-payment of his fee and have to defend his lack of knowledge of federal employee benefit and state insurance laws in court. ]]



Quote:
o if the change of bene form was filed out incorrectly and my father is now deceased and my mother (the ex wife) is disqualified ...where does the money go? I am the contingent bene on this policy...would it go to me?


If the named beneficiary is disqualified statutorily (by law), then the contingent beneficiary is next in order to receive the policy proceeds. If that is you, then you should file your own claim with the insurance company.



In a "worst case" scenario, if your claim is also denied (if you were not actually listed as the contingent beneficiary), then the money goes into the estate of your deceased father, where the probate court will first use the money, together with all other estate assets, to satisfy the claims of creditors, and then parcel the remainder of the estate (as cash or property) to heirs in the order established according to state law.


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Last edited by MaxHerr on Wed Sep 21, 2011 4:11 pm
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PostPosted: Wed Sep 21, 2011 12:22 pm   Post subject:   

Quote:
Meanwhile, as I can think of, you may not receive the proceeds. As your mom and your dad's second wife, both are alive.



If the insurance company chooses not to give the benefits to the current spouse, it'll go to your mother.


This information from MonaWayne is fundamentally incorrect, and shows a lack of understanding of death claims and beneficiaries.



It has nothing to do with who is alive if neither of the living persons is not listed as a beneficiary. Insurance companies do not act with disregard for the law. And they don't "choose" which beneficiary will be paid. They follow the dictates of the contract and state insurance laws.



If state law disqualifies a named beneficiary as the result of a divorce, the insurance company cannot lawfully pay anything to that person, despite their assertions. Likewise, a person cannot be substituted by the insurance company as the life insurance beneficiary simply because they are the current spouse.



The only thing the insurance company can do is pay the money to a named beneficiary. If the primary is deceased or disqualified at the time of the insured's death, the contingent beneficiary -- if one was named -- is automatically elevated into the primary position.



If this matter involves an employer-sponsored group life policy, the rules are not different. ERISA only governs eligibility for the benefit on the part of the employee. Unlike retirement plans, where federal law controls and now (as of 2009) relies on the plan document to determine the beneficiary of employer-sponsored retirement plan proceeds (usually dependent on a current beneficiary statement or other exclusionary language), as stated in my prior post, state law currently governs all other aspects of life insurance contracts, group or individual, unless it impermissibly affects an ERISA plan document. If state law is in conflict with an ERISA plan document, then state law is preempted. Beneficiary is one area where state law may conflict with a plan document.



So disregard Mona's assessment of your situation. If you actually were named as the contingent beneficiary, the life insurance proceeds would be payable to you.


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Last edited by MaxHerr on Wed Sep 21, 2011 4:15 pm
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PostPosted: Wed Sep 21, 2011 12:25 pm   Post subject:   

Quote:
Meanwhile, as I can think of, you may not receive the proceeds. As your mom and your dad's second wife, both are alive.



If the insurance company chooses not to give the benefits to the current spouse, it'll go to your mother.


This information from MonaWayne is fundamentally incorrect, and shows a lack of understanding of death claims and beneficiaries.



It has nothing to do with who is alive if neither of the living persons is not listed as a beneficiary. Insurance companies do not act with disregard for the law.



If state law disqualifies a named beneficiary as the result of a divorce, the insurance company cannot lawfully pay anything to that person, despite their assertions. Likewise, a person cannot be substituted by the insurance company as the life insurance beneficiary simply because they are the current spouse.



The only thing the insurance company can do is pay the money to a named beneficiary. If the primary is deceased or disqualified at the time of the insured's death, the contingent beneficiary -- if one was named -- is automatically elevated into the primary position.



If this matter involves an employer-sponsored group life policy, the rules are not different. ERISA only governs eligibility for the benefit on the part of the employee. Unlike retirement plans, where federal law controls and automatically installs the current spouse as the beneficiary of employer-sponsored retirement plan proceeds, as stated in my prior post, state law currently governs all other aspects of life insurance contracts, group or individual.



So disregard Mona's assessment of your situation. If you actually were named as the contingent beneficiary, the life insurance proceeds would be payable to you.


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PostPosted: Wed Sep 21, 2011 12:58 pm   Post subject:   

Finally, if this matter does involve an employer-sponsored life insurance policy, the current spouse might have a cause of action against the employer.



The change of beneficiary was probably initiated through the employer's HR department. Someone there probably gave your father the beneficiary change form, and may have received it back to send to the insurance company. If so, that person has some responsibility to look the form over to assure that it is completely and properly filled out.



That HR employee acts as the employer's "agent" (not as an insurance agent), and obligates the employer to his/her negligent acts. Not all HR employees are knowledgeable when it comes to filling out such forms, and most probably have little or no understanding of the importance of insurance beneficiaries. But that does not relieve the employer if the HR employee was "negligent" in the performance of his/her duties.



If it could be proved that someone at the business was in the chain of events between your father and the insurance company, then the business's failure to properly assist the employee might obligate the company to provide the equivalent of the death benefit to those persons the deceased employee intended to be his beneficiaries.



You could receive the death claim from the insurance company, and the current spouse could receive an equal amount from the employer directly (minus the 30%-40% the attorney would take). Maybe even more if punitive damages were awarded.



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