by bjamm1972 » Thu Jul 23, 2009 05:56 pm
If there was not a designated beneficiary on a life insurance policy(due to the death of the beneficiary)and there was no contigent beneficiary named, would the money go into the deceased estate or would it go by Preference Beneficiary ie., spouse then minor children, etc., Is there anyway that you could contest the Preference Beneficiary if there was what you thought just cause to?
Posted: Thu Aug 13, 2009 11:04 am Post Subject:
Now that the Experts on this forum have straightened me out on my Life Insurance policy.....'Primary, 'Secondary' ( and I thank you, again, for that..!!) please explain to me what 'Default' Beneficiary means. Am I missing something?! Thanks.
I've been using the term "default", but the correct terminology is "preference" beneficiary. What happens if you die and there are no living beneficiaries? This is where "preference beneficiary" comes into play. An insurance policy is a contract. In this contract, it usually has language as to what happens if there is no living beneficiary. It will list the order in which the proceeds will be paid. For instance, it may say something along the lines of, "spouse, children, parents, sibling, estate".
Those are the preference beneficiaries. Let's assume that you die with a policy that has those as the preference beneficiaries. The beneficiary designation that you have on file with the insurance company is your sister, but she is deceased and you haven't named a contingent. If your
spouse is alive, he’ll get the money. If he’s dead, your children will get the money. If they’re dead, your parents will get the money. If they’re dead, your siblings will get the money. If they’re dead, your estate will get the money.
In short, a default beneficiary is a beneficiary that gets the money if no named beneficiary is alive.
Posted: Fri Aug 14, 2009 01:46 am Post Subject: insurance
OHHH...I get it!! Good explaination, thanks a bunch. And, of course, that's ANOTHER reason why you should have Beneficiaries named. :D
Posted: Tue Jun 21, 2011 02:32 am Post Subject: auto benificiary eligibility
Are step children considered the same as natural born children when an insurance beneficiary is determined?
Posted: Tue Jun 21, 2011 01:33 pm Post Subject:
Insurance beneficiaries are determined by the owner of the policy, and may be anyone or anything of that person's choosing. It has nothing to do with being a natural born or step child.
Posted: Fri Jun 24, 2011 01:08 pm Post Subject:
Max, there you go again. Work on your reading comprehension. Notice the word choice of "determined" and not "named". This is a thread about what happens if no beneficiary is named or none is living. It is about how it is determined who gets the money.
It absolutely can make a difference if one is natural born or a step child.
Posted: Fri Jun 24, 2011 03:39 pm Post Subject:
YOU NEED TO LEARN TO READ, because you missed the whole point. It is not about determining who gets the money, the question was about who can be life insurance beneficiaries. No one other than the policyowner DETERMINES who will be the beneficiary of life insurance proceeds.
Insurance companies do not DETERMINE who the beneficiary is, insurance codes do not determine who the beneficiary is, and probate law does not determine who a life insurance beneficiary is. Only the policyowner DETERMINES who will be a beneficiary (and, truth be told, the actual word is "DESIGNATES").
When is comes to disposing of the policy proceeds if there is no named/living beneficiary, insurance companies are guided absolutely by the policyowner first, then by state probate laws if the policyowner is incapable (as in, dead). But to preempt probate law, perhaps, they include the tiny statement in the contract that says something like, "In the event there is no living beneficiary, we will pay the proceeds of this policy to the policyowner or to the policyowner's estate," where another person's will might take precedence in the distribution of estate assets, the life insurance money is simply added to all other cash (bank accounts) and liquidated assets (homes, cars, furniture, jewelry, stocks, bonds, etc).
That "contingency", as described in the life insurance contract, could allow the proceeds to pass to a living person (without being named specifically) instead of being forced by law into the estate of a dead person, where creditors will have the first shot at the assets. But when the policyowner and the dead insured are the same persons, the policy proceeds have no other place to go except into their estate in the absence of a named beneficiary, because the requirement of state probate laws is to aggregate all estate assets into one pile of money and property, and distribute it as directed in the law.
From the estate, the Probate Court is left to DETERMINE the distribution of real and personal property, as well as the sum of cash assets, and it well beyond the "determination" of life insurance beneficiaries at that point. It is merely the disposition of estate assets, and under probate law stepchildren might not receive anything if they were not legally adopted. The probate court does not determine who will be life insurance beneficiaries, the probate court only determines who will be beneficiaries of the decedent's ESTATE. Stepchildren (in addition to all other persons) are free to add their claim to estate assets, and it's up to the probate court to determine whether that claim is valid or not.
When a person dies INTESTATE (without a will), probate law usually guides the distribution of estate proceeds according to the PER STIRPES rule, which looks to BLOOD RELATIVES and bypasses those who are not in the blood line. Legally adopted children will be included in the per stirpes distribution of a decedent's estate, but must be bypassed if not legally adopted. Aunts and uncles, nieces and nephews, even grandchildren . . . they all have a priority claim compared to unadopted stepchildren. So if the probate court does not find validity in the claim of an unadopted stepchild, they will not receive a share of the estate.
AND ALL OF THAT HAS ABSOLUTELY NOTHING TO DO WITH BEING A LIFE INSURANCE BENEFICIARY.
So suck up your bad attitude, your inability to understand questions -- to which you never actually leave any answers -- and crawl back under your rock.
If a policyowner wants to name or not name a stepchild as a beneficiary, that DETERMINATION is solely up to the policyowner. Insurance companies and contracts are silent on the matter. Perhaps you should be too.
Posted: Sun Jun 26, 2011 10:40 am Post Subject:
Max, do yourself a favor and read the whole thread. This isn't about designating a beneficiary. It is about what happens when their is no living named beneficiary at time of death.
You correctly stated in responding to me: "That "contingency", as described in the life insurance contract, could allow the proceeds to pass to a living person (without being named specifically)".
Now look at that statement in relation to her question and this entire thread.
Interested asked, "Are step children considered the same as natural born children when an insurance beneficiary is determined?"
You answered, "It has nothing to do with being a natural born or step child."
When a beneficiary is being "determined" (like Interested asked) as opposed to being "designated" (like she did not ask, but you chose to answer), the correct answer is that step children aren the same as natural born children.
Max, don't worry about it. Like every other thread, I don't expect you to own up to your error.
Posted: Mon Jun 27, 2011 08:12 am Post Subject:
Look . . . you and I could be the beneficiaries of someone's insurance policy. Doesn't matter if we're siblings, step-children, or the total strangers that we actually are. Being named a beneficiary has nothing to do with that.
When a beneficiary is being "determined"
Who do you think makes this "determination"? It's not up to the insurance company, it's up to the policyowner. Now, if a person writes a flawed beneficiary statement such as "All my children" it might be up to a court to decide what was meant by that. So if that's an error on my part not to have mentioned it until now, so be it. Nothing else stated is incorrect.
And it doesn't matter what preceded the question in other posts in the thread, this was a specific question, and it received a specific answer.
Posted: Mon Jun 27, 2011 07:49 pm Post Subject:
Max,
It is a shame that you aren't trying to answer the question in the context of the discussion. However, even if we look at it as a stand alone question, your original answer does nothing to answer the question.
Are step children considered the same as natural born children when an insurance beneficiary is determined?
Sure, anybody can name anybody as beneficiary. However, the answer to this question is still "no".
Unless the beneficiary designation specifically says children and step children or names them by name, natural born children and step children are not the same.
I wish that you would simply answer the questions instead of using the site to advertise your business.
Posted: Mon Jun 27, 2011 08:47 pm Post Subject:
And you fundamentally misunderstand insurance beneficiaries.
If a person merely writes "My children" or "All my children", and there are natural and step-children in the household, the matter is entirely clouded. But insurance companies could care less, and if it turns into a dispute, they will throw up their hands and turn the money over to the probate court, where there will be a resolution of the matter based on testimony and/or evidence presented.
But, again, at that point, it has absolutely NOTHING to do with insurance beneficiaries, and everything to do with entitlement to estate assets. The question was not about that.
And again, since you haven't answered the question, who do you think "determines" an insurance beneficiary?
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