The Denied Life Claim: Irrevocable Beneficiary Designation
Many individuals often wonder if they can change the beneficiary on their life insurance policy. The answer to this question depends on various factors. In general, you have the flexibility to change your life insurance beneficiary as frequently as you wish. However, your insurance company may impose certain conditions or require specific actions to be taken when modifying the beneficiary designation.
Discover more about life insurance beneficiary rules
Regrettably, in numerous instances of denied life insurance claims, applicants seeking to change a beneficiary fail to complete all the necessary steps in the process, ultimately preventing the change from being finalized. Typically, they initially apply for a change in policy ownership. However, this step alone is insufficient. To successfully change the beneficiary, an application for the beneficiary change must be submitted to the insurance company and subsequently approved. The insurance company is then responsible for sending the endorsed copy of the beneficiary change application to the new beneficiary. This document is crucial as it serves as the primary evidence of the new beneficiary status.
However, all too often, due to the negligence of an insurance agent or other reasons, the endorsed copy fails to reach the intended beneficiary. When the insured individual passes away, the insurance company may argue that the beneficiary was never changed, despite the change in ownership having been processed. This complex situation often necessitates a comprehensive investigation by a skilled life insurance attorney.
Irrevocable Beneficiary Designation
During the insurance application process, you may have chosen to designate the beneficiary as irrevocable. This means that the beneficiary cannot be changed without the consent of that same beneficiary. The policy itself will indicate whether a beneficiary is irrevocable or not. While an irrevocable beneficiary designation can be advantageous for estate planning purposes, the legal status of an irrevocable beneficiary is not entirely clear. Some may perceive an irrevocable beneficiary as a co-owner of the policy, thereby requiring the beneficiary's consent for any policy-related actions. Conversely, others may argue that the consent of an irrevocable beneficiary is solely necessary for changing the beneficiary designation. This ambiguity surrounding the legal status of an irrevocable designation may compromise the rights of the beneficiary if the policy owner exercises other rights, such as surrendering or lapsing the policy. Due to this uncertainty, it is generally preferable to use revocable beneficiary designations. If you require the assistance of a life insurance lawyer, do not hesitate to contact us today.