A recent Fifth Circuit Court of Appeals decision involved the intersection of federal bankruptcy law and Texas law regarding ownership of a life insurance policy. The court determined that the insured and the beneficiaries of life-insurance policies can claim the cash surrender value of those policies as exempt.
Read MoreIn a very recent decision, the Fifth Circuit Court of Appeals affirmed a federal magistrate judge’s decision to deny life insurance benefits. The life insurance company claimed it was proper to deny the life insurance benefits to a widow, because her husband had misrepresented his smoking history on the life insurance application. After a bench trial the magistrate agreed and the court of appeals affirmed the denial decision.
Read MoreI handle a lot of life insurance cases. Primarily in Texas, but at times in other states as well. Life insurance beneficiary disputes make up half or more of my caseload. Because I handle them so often, I have a good feel for not only the law but also the strategy of litigating and resolve the disputes. Also, after a dozen years I have a good idea of which cases are strong and which have significant problems, either factually or legally. I do take some difficult cases, but craft a strategy to maximize the result.
Read MorePublic policy obviously does not reward unjustified killing. What happens to the life insurance proceeds if the beneficiary is a murderer?
Read MoreA former husband was found in contempt for failing to comply with the divorce court’s judgment that he maintain a life insurance policy, with his former wife as the beneficiary for the benefit of their children
Read MoreIn a decision issued today, the Texas Supreme Court affirmed that the intent to deceive standard is still the law in Texas. I had written about the intent to deceive standard previously. Essentially, a life insurance company cannot deny payment on a claim because of a misrepresentation on a policy application, unless it can prove the applicant intended to deceive the life insurance company.
Read MoreWe routinely handle life insurance beneficiary interpleader cases for clients. A life insurance company files an interpleader lawsuit when there are competing claims to life insurance benefits.
Read MorePrimerica v. Cruz, et al is a recent decision in a life insurance beneficiary interpleader case from the North District of Texas. The case involved a dispute over life insurance proceeds for a policy issued by Primerica to Patrick McClevland.
Read MoreMany people obtain life insurance through their employer. If it is through a private employer, the life insurance benefits are governed by a federal law: the Employee Retirement Income Security Act of 1974, commonly referred to as ERISA.
Read MoreOne common issue that I often encounter is a disagreement about whether a former spouse is entitled to receive life insurance benefits. A typical scenario is that a married couple buys life insurance and designates each other as the beneficiary. But when they get divorced, they forget to update the beneficiary designation.
Read MoreA common situation is that a decedent owns life insurance that names their former spouse as the beneficiary. There are reasons for someone to designate their ex-spouse as the beneficiary of life insurance proceeds. Those situations usually involve children.
But it is also very common that the deceased simply forgot to remove their ex-spouse as the beneficiary. I often get calls in heartbreaking situations: such as a man who remarries, has children with his current wife, but never changed the designation from his former wife. That can be understandably devastating to the current wife with minor children.
Read MoreFaced with competing and conflicting claims, a life insurance company will file an interpleader lawsuit. It is important to hire a lawyer experienced in handling interpleader cases.
Read MoreIn Guzman v. Allstate, the Fifth Circuit reversed a summary judgment the trial court granted to a life insurance company.. A gentleman applied for and was approved for a life insurance policy. In the application he was asked whether he was a smoker. He responded "no." The insurance company obtained some limited medical records and ordered a urine test. None of those records apparently showed that he was a smoker. Neither did the test
Read MoreUnder Texas law, an insurer may avoid liability on a life insurance policy because of the misrepresentation of the insured in the policy application. Life insurance companies generally have two years after issuing a policy to rescind it based on the alleged misrepresentation. Section 705.051 of the Texas insurance Code s entitled “Immaterial Misrepresentation in Life, Accident, or Health Insurance Application.” It provides that “[a] misrepresentation in an application for a life, accident, or health insurance policy does not defeat recovery under the policy unless the misrepresentation: (1) is of a material fact; and (2) affects the risks assumed.”
Read MoreA fairly common life insurance beneficiary dispute involves designations in favor of former spouses. Under the Texas family code designations in favor of former spouses are automatically revoked by operation of law. However an exception is if the divorce decree specifically provides that the former spouse will be designated as the beneficiary of a life insurance policy.
Read MoreThe insurance company had denied payout on an accidental death and dismemberment claim and the court of appeals upheld that denial. A woman fell down a flight of stairs and suffered severe hemorrhaging and died. Her family made a claim under the accidental death policy.
Read MoreI represent quite a few clients in life insurance beneficiary interpleader cases. No two cases are the same. In some cases, I represent the designated beneficiaries. Other times I represent the contestant. Sometimes mental capacity and undue influence are primary issues. Other times, there is a dispute stemming from a marriage or claimed community property interests.
Read MoreLife insurance is an asset of a marriage. Under Texas law, assets acquired during marriage are typically considered community property, owned by both spouses. Under some circumstances, a spouse may have a claim to life insurance proceeds even if they are not the designated beneficiary.
Read MoreBeneficiary designations can be overturned. But you must have a solid legal and factual basis to successfully overturn a beneficiary designation. Otherwise, you are wasting time and possibly money. We have over a decade of experience evaluating designation challenges.
Read MoreAccidental death insurance is not life insurance. Life insurance typically pays out upon the insured's death, regardless of the cause. However, accidental death insurance pays out only if the death meets the criteria of the policy terms.
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