Life Insurance: Disputing a Beneficiary on a Claim

Posted Jun 10, 2019.


Having a life insurance policy in place in the tragic event of a loved one dying is often vital in ensuring that the beneficiaries of the policy will have some or all of their financial concerns taken care of. Beneficiaries of life insurance policies are usually other family members and loved ones, and monies provided by the policy can be used to pay off a mortgage, clear debts or indeed can be used to cover everyday expenses. This is especially important should those family members be unable to cope financially without the income from the deceased policyholder.

Am I a beneficiary and can I dispute this?


Despite what an individual may think or may have been told, they may not be able to benefit from a life insurance policy if there have been material changes in the policyholders circumstances since taking out the policy that have not been notified to the insurance company. For example, the insured may have originally named his or her children as beneficiaries on the policy when it was taken out, but has since remarried and now has step children. In this scenario, the step children may then feel they have a right to a part of the life insurance pay-out. 

However, disputing the beneficiaries of an insurance claim is not straightforward and should only be done when an individual feels that they have a genuine right to do so. Life insurance is a ultimately a type of legally binding, written contract. Generally speaking, an individual takes out life insurance cover because it is a good idea; sometimes they are compelled to do so by the Courts, such as when a spouse gets a divorce and they have to pay child support or maintenance. This can often be the main source of money for the spouse and children and should the payer die, it would lead to significant financial hardship. 

Policyholder intent and challenging the insurer


A key part of many contested life insurance claims is the intent of the policy holder – what and who did they want to be covered when they took out the cover. Some disputes arise when an individual claims that the policyholder was unduly influenced or coerced into taking out the cover, or that the beneficiaries of an existing policy have been changed under similar circumstances. There may also be other allegations of fraud by the contesting individual.

A life insurance company will be very methodical and thorough when it comes to paying a claim on one of their policies, and if they are challenged by an individual who is contesting a beneficiary, they are usually unable to pay the claim. If a beneficiary dispute cannot be resolved via the company’s in-house processes, the insurer is likely to approach the Courts for them to make a decision on who is actually a beneficiary and who will ultimately get paid. 

 

Professional help with Life Insurance Disputes

At Bakers Solicitors, disputed insurance claim cases are dealt with on a no win, no fee basis. There is no upfront or unexpected costs, so if you feel you have been treated unfairly by an insurance company please contact us today for friendly and professional assistance. You can contact us by email, arrange a free consultation online or ring us on FREE on 0800 731 7284.