The person covered by a life insurance policy possesses the ability to modify beneficiaries throughout the policy's duration. The limitations on this power to designate or alter beneficiaries are contingent upon the provisions delineated in the life insurance policy itself. However, there are instances wherein changing the beneficiaries of a life insurance policy can lead to claim denial by the insurance company. Moreover, in certain circumstances, eleventh-hour alterations to beneficiaries may give former beneficiaries grounds to contest claims made by current beneficiaries. Our proficient life insurance attorneys recently achieved success in a $675,000.00 beneficiary dispute involving Prudential life insurance.
Modifications made to beneficiaries at the eleventh hour can raise concerns for life insurance companies. Typically, the insured individual retains the freedom to modify beneficiaries as desired, as long as these modifications comply with any stipulations specified in the life insurance policy. However, if the insured person is elderly, gravely ill, or lacks mental capacity, and the change in beneficiaries occurs shortly before their demise, there is a possibility that undue influence has been exerted upon them. For instance, a caregiver or estranged family member may have manipulated or influenced the vulnerable insured person into adding them as a beneficiary or removing other beneficiaries from the life insurance policy. In some cases, the opportunistic individual may even assist the insured person in signing the requisite forms to effectuate the beneficiary changes. We recently resolved a $325,000.00 beneficiary dispute involving Mass Mutual life insurance.
These last-minute alterations may be deemed invalid. If the insured person possessed sufficient mental capacity and exercised their independent will when opting to modify beneficiaries, the alteration will likely be regarded as valid. Conversely, if the insured person was in a vulnerable state, lacked mental capacity, and was incapable of exercising their free will, the change in beneficiaries will likely be deemed invalid. Furthermore, if the change in beneficiaries raises doubts, the former beneficiaries (i.e., those listed in the insured person's life insurance policy before the eleventh-hour change) may assert their claim to the death benefits. They may also furnish evidence that the last-minute change in beneficiaries was invalid due to various reasons. Our life insurance law firm successfully resolved a $100,000.00 beneficiary dispute involving Globe within a week.
Additionally, life insurance companies may deny claims if the beneficiary's alteration does not adhere to the requirements set forth in the insured person's life insurance policy. Certain policies may mandate the presence of a specific number of witnesses when executing a change in beneficiaries. Others may stipulate that beneficiary changes must be made within a specific timeframe preceding the insured person's demise. Provided the requirements for modifying beneficiaries are met, the life insurance company should honor the claim without issue. However, if the insured person failed to satisfy these requirements, the new beneficiary's claim is likely to be denied by the life insurance company.
Both the insured person and the beneficiaries must familiarize themselves with the requirements outlined in the life insurance policy concerning beneficiary changes. Failure to adhere to these requirements may result in the life insurance company rejecting the claim of the new beneficiary. Moreover, it is crucial for the insured person's beneficiaries to recognize that a change in beneficiaries may be deemed invalid if it is determined that the insured person lacked sufficient mental capacity or free will at the time of the alteration. Finally, beneficiaries should be aware that they have the right to contest a change in beneficiaries on the insured person's life insurance policy if they observe certain warning signs.