by Guest » Tue Sep 30, 2008 04:32 am
Hi..is it possible for me to show someone as my life insurance beneficiary if the person is not my relative? What do I need to do in order to change my life insurance beneficiary?
Purpleheaded08
Purpleheaded08
Posted: Sat Apr 30, 2011 11:36 pm Post Subject:
If your wife's mother had a life insurance policy in force at the time of her death, but there was no named beneficiary, the money is payable only to the policyowner or the policyowner's estate. Assuming that your wife's mother was the owner (true in the overwhelming majority of individual policies), the policy proceeds are payable to her estate. No one may "claim" the proceeds if there is no named beneficiary.
The estate will be distributed according to her will or state probate laws. Your wife may or may not receive any of the proceeds if there are creditors of the estate who present superior claims. If your wife has siblings, the estate will be divided among all the siblings. Estate proceeds are not subject to federal taxation -- they are an inheritance. The decedent's estate could be subject to estate taxes if its total value exceeds $5,000,000 this year.
Posted: Fri May 20, 2011 03:52 am Post Subject: Life insurance without beneficiary
My Dad died and had a life insurance policy from his work with no designated beneficiary. He was married to my step Mom at the time of his death, but she died one week later. Both died in the State of California. My step Mom's parents are claiming they should get the life insurance. Who is entitled to the insurance?
Posted: Fri May 20, 2011 04:59 pm Post Subject:
My Dad died and had a life insurance policy from his work with no designated beneficiary.
First of all, please allow me to offer my condolences for the loss of your father.
A life insurance policy provides a benefit [money] to someone when the insured's heart stops beating. Therefore, please understand the most basic element of any life insurance policy is the beneficiary designation. I'm not even sure a policy - any policy - would even be issued without a named beneficiary.
If someone out there knows of a company who will issue a policy without a named beneficiary, please let me know.
Secondly, I would ask that you again allow me to offer my condolences on the loss of your stepmother.
Her parents are claiming they should get a life insurance benefit? Your stepmother obviously wasn't that old.
Who is entitled to the insurance?
This is easy. In the state of California, the named beneficiary is entitled to the insurance proceeds. I would suggest you contact your father's place of employment (usually the Human Resources Department) and get some answers about his life insurance policy. In fact, they might even have a copy of it. If not they can certainly direct you to the company that issued the policy. I guarantee you the document exists somewhere.
Posted: Sat May 21, 2011 01:06 am Post Subject:
1) the original beneficiary could have died first leaving no beneficiary.
2) it is possible for a policy to be issued without a named beneficiary.
A) even without a named beneficiary, there is still a beneficiary.
B) what reason would the insurance company have in terms of caring about this in general?
Posted: Sun May 22, 2011 10:48 pm Post Subject:
1) the original beneficiary could have died first leaving no beneficiary.
Yes, good call - that could be correct. And because only the insured knew the policy even existed, he must have felt he didn't need to mention anything - to anyone -when the primary beneficiary he named on the policy died before him. Maybe he just figured he'd keep paying premiums and let the step mom figure it all out when he died - and then she died a week later and his whole plan fell through.
2) it is possible for a policy to be issued without a named beneficiary.
Ok, I'll give you this one too. He must have left the beneficiary designation box blank because he had every intention of leaving the proceeds of his policy to his estate? That must have been what you meant - right?
If he named a trust or any estate planning tool as beneficiary, that still counts as a beneficiary designation.
A) even without a named beneficiary, there is still a beneficiary.
The insured's estate?
B) what reason would the insurance company have in terms of caring about this in general?
Just a little thing called Contract Law. At some point in the past, the insurance company promised to pay someone when the insured died - and they are legally obligated to do so.
Posted: Mon May 23, 2011 12:58 pm Post Subject:
It is common for people to forget to update beneficiary designations.
Without a living named beneficiary, the default beneciary would be the owner (or the owner's estate) and not the insured's estate.
You missed the point. The insurance company does need to make a payment, but they don't care to whom the payment is getting paid as long as it is the correct person. If nobody is named, the contract will specify where it gets paid.
Posted: Mon May 23, 2011 04:48 pm Post Subject:
Without a living named beneficiary, the default beneciary would be the owner (or the owner's estate) and not the insured's estate.
Let's assume the policy owner and insured are the same person.
You missed the point. The insurance company does need to make a payment, but they don't care to whom the payment is getting paid as long as it is the correct person. If nobody is named, the contract will specify where it gets paid.
Because I've obviously missed the point, thanks so much for bringing me up to speed on this stuff. Let me see if I've got this straight:
The insurance company is bound by contract to make a payment to someone - as long as that is the right person. And the "right person" would be the named beneficiary? And if this named beneficiary predeceases the insured (in this case, we'll assume the owner and insured is the same person) and this person fails to update his beneficiary information which, according to you happens with some regularity, it is the actual contract / life insurance policy that dictates where the benefit is to be paid?
Posted: Mon May 23, 2011 08:44 pm Post Subject:
Why should we make an assumpion about the owner?
Are you asking questions or are you trying to make a point?
Posted: Mon May 23, 2011 09:00 pm Post Subject:
In the original post, it was stated:
My Dad died and had a life insurance policy from his work with no designated beneficiary.
From an investigative standpoint, the words "from his work" would indicate this was some sort of work-related life insurance policy. If the policy in question was part of an employee benefit package - and that's more-than-likely the case, the insured would have also been the policy owner. I am familiar with the key-employee concept and admit that while the company might have owned the policy, I just doubt this was one of those cases. If it had been, I seriously a beneficiary designation would have been overlooked.
Wouldn't you agree?
Posted: Mon May 23, 2011 11:04 pm Post Subject:
My guess would be that you are correct. I would argue that these are the policies that are most likely to have no living listed beneficiary. This is especially true if it is employer provided. This is because of the lack of agent involvement primarily. It is very similar to all of the old retirement plans with ex wives as beneficiary.
Ex. Ten years ago Joe took a job with XYZ. They gave him 225K of coverage. He named his mom as beneficiary. She has died. It never crossed his mind to make a change.
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