Beneficiary disputes and the interpleader process
The life insurance company receives competing claims to the benefits
An interpleader is a form of a lawsuit filed by a life insurance company to resolve competing claims to life insurance proceeds. In short, the insurance company sues the competing claimants. But they aren’t sued because they have done something wrong and the life insurance company claims they should pay. Instead, they are sued in order to come to the court and explain why they should receive the life insurance policy benefits, instead of the competing claimant.
The process starts when multiple persons claim to be the rightful beneficiary. That can be because of any number of reasons. There could be competing beneficiary designations, claims that a designation is not valid for some reason, claims of community property interests, or clams that a purported beneficiary is disqualified for some reason.
The life insurance company files an interpleader lawsuit
When faced with competing claims, the insurance company will put the matter under review and suspend payment to anyone. In some situations, someone at the insurance company may express and opinion regarding the proper beneficiary. But rarely will the life insurance company choose a side and make payment. And rarely when the competing claimants have lawyers. The legal counsel for the life insurance company will instead start the interpleader process.
Hiring an experienced life insurance lawyer
It is extremely important to hire a lawyer if you are one of the claimants to the benefits. A lawyer will help properly frame the claim. Even though the insurance company will likely not choose a side, letters to the insurance company from unrepresented claimants may hurt their case in court.
And don’t hire a lawyer who happens to be near where you live. Or who prepared your sister’s will. Or who represented your cousin in her divorce. Or represented your brother in a DWI.
Life insurance cases involve complex and unique legal issues. It is extremely important that your lawyer knows if federal or state law applies. Has your lawyer even heard of ERISA? Know how ERISA preemption impacts your claim?
We have handled hundreds of life insurance beneficiary disputes, Many have ended up in both state and federal courts as interpleader lawsuits. A few even gone to the court of appeals. But most are settled on favorable terms to our clients.
Whether you're contesting a beneficiary designation or facing competing claims, it is very important to consult with a seasoned life insurance lawyer early in the process. We will help you position your case so you have the best chance of obtaining the life insurance policy benefits.
Call life insurance lawyer J. Michael Young of Wynne, Smith & Young PLLC at (800) 323-1857 if you are facing a life insurance beneficiary dispute.