What to know if you’ve been named the beneficiary of a life insurance policy
If you’ve just learned that you’re listed as a life insurance beneficiary, you might be unsure what that really means—or what to do next. While it may feel like a distant, abstract responsibility, there are several things you should clarify while the policyholder is still alive. Life insurance is a valuable estate planning tool, but it’s not automatic. If you don’t have the right information when the time comes to file a claim, you could be left fighting delays, confusion, or even a denied payout.
Life can change unexpectedly. That’s why preparation matters.
At our law firm, we work with clients who have had their life insurance claims denied—often for reasons that could have been anticipated or addressed early on. Even when a policy appears valid and up to date, beneficiaries may find themselves navigating complex paperwork, competing claims, or coverage exclusions they didn’t know existed. The time to get informed is now, not after a loved one passes away. Whether you’re a spouse, family member, or close friend, these five questions can help you avoid future headaches.
#1: Do you know who the insurer is and how to reach them?
This may sound obvious, but many people don’t know the name of the life insurance company or where the policy documents are stored. In most cases, the insurer won’t reach out after a policyholder’s death. They may not even know the person has passed. That means it’s up to the beneficiary to contact the company, submit a claim, and provide all required documentation—including a death certificate.
If the policyholder is not your spouse or you don’t share a household, make sure you know the name of the insurer, the policy number, and where the paperwork is kept. Without this, filing a claim could be extremely difficult—or even impossible if time-sensitive deadlines apply.
#2: Are there exclusions that could nullify the policy?
Life insurance policies often contain inherently dangerous activity exclusions, which relieve the insurer from paying out if the policyholder dies during high-risk activities. Common exclusions include:
Skydiving
SCUBA diving
Racing motorcycles
Mountaineering or bungee jumping
Some policies specify the exclusions in detail, while others leave the term “inherently dangerous” vague—giving insurers wiggle room to deny claims later. If you’re financially dependent on a payout from the policy, it’s worth having a conversation with the policyholder about these restrictions. You don’t want to be blindsided later because a single recreational activity voided coverage.
#3: Is the policy active—and who pays the premiums?
Not all life insurance policies are maintained by employers. Many are privately held, with premiums paid monthly, quarterly, or annually. If the policyholder becomes incapacitated or forgets to pay, the coverage could lapse—and the insurer would then have legal grounds to deny your claim.
Beneficiaries should ask:
Who is paying the premiums?
Are payments being made automatically?
If the policyholder becomes ill or incapacitated, who will ensure payments continue?
This is especially important for elderly policyholders or those managing chronic illnesses. If you’re a spouse, you may be handling finances already. But if you’re a non-spouse beneficiary—like an adult child, partner, or friend—you should discuss how to ensure the policy doesn’t unintentionally lapse.
#4: Do you understand the contestability period?
Most life insurance policies include a contestability period—typically two years from the policy’s effective date. If the policyholder dies during that time, the insurer has the right to investigate the application for misrepresentations. They’ll review health disclosures, lifestyle habits, and even things like medical records or social media posts.
The unsettling part? Even if the misrepresentation has nothing to do with the cause of death, it can still result in a denied claim. For example, if someone failed to disclose a history of smoking, but died in a car crash, the insurer could still deny the payout due to that omission.
If your loved one’s policy is relatively new, be aware that a claim might be delayed—or denied—if the insurer initiates a contestability review. That doesn’t mean you’ll lose the benefit, but it’s a process best handled with legal support.
#5: Are there competing beneficiary claims you should anticipate?
Sometimes more than one person believes they are entitled to the policy proceeds. This is especially common in complex family situations: second marriages, divorces, estranged children, or outdated policies that still name a former spouse or deceased relative as beneficiary.
If a competing claim arises, the insurance company may file an interpleader lawsuit. This means the insurer deposits the funds with the court and asks a judge to decide who should receive the payout. While this protects the insurance company from liability, it delays your ability to access the funds—and may require legal representation to protect your claim.
To avoid this situation, encourage the policyholder to keep their beneficiary designations up to date and to be clear in writing about who should receive the proceeds. Vague or inconsistent designations can lead to long, expensive legal battles.
Why beneficiaries should prepare now—not later
The death of a loved one is overwhelming enough without the added stress of claim disputes. By asking these five questions now, you can help ensure that everything is in order and reduce the chance of an unpleasant surprise when the policy becomes active. And if a dispute arises, having the support of a life insurance attorney can make all the difference.
We help beneficiaries fight denied claims.
Our law firm works exclusively in the area of life insurance claim denials. Whether you're facing a delay, a denied claim, or an interpleader action, we have the experience to fight back. We don’t charge any legal fees unless we win your case. If you’re unsure about your rights as a beneficiary or have already been denied, call us for a free consultation. You don’t have to navigate this process alone—we’re here to help.
FAQ: Life Insurance Beneficiaries
Do beneficiaries need to notify the insurance company?
Yes. Insurers are not automatically notified of a policyholder’s death. The beneficiary must submit a death certificate and claim form to initiate the process.
What happens if no one knows who the insurer is?
The policy may go unclaimed indefinitely. That’s why it’s important for beneficiaries to know the insurer’s name, policy number, and location of the documents.
Can a life insurance policy be voided due to unpaid premiums?
Yes. If payments lapse, the policy can be canceled. Many people lose coverage late in life due to missed payments or forgetfulness, so it’s essential to ensure premiums are current.
What if two people believe they’re the rightful beneficiary?
The insurance company will likely file an interpleader and let the courts decide. Legal representation is key in proving your entitlement to the proceeds.
Can a life insurance claim be denied if the policyholder lied?
Yes—especially during the contestability period. However, not all misrepresentations justify denial, and many denials can be overturned with legal help.