Life insurance policies will name one or more individuals as primary beneficiaries who are entitled to the benefits of the policy upon the death of the insured. However, many policies also include contingent beneficiaries, people designated to receive the benefits if the primary beneficiary cannot or does not claim them. The designation and claims of contingent beneficiaries can lead to life insurance beneficiary disputes, particularly when the policyholder's intent is unclear or competing interests arise. A contingent beneficiary comes into play only under specific circumstances, such as the death of the primary beneficiary before the insured, the inability of the primary beneficiary to be located, or the primary beneficiary disclaiming their interest in the policy. This situation can lead to disputes among life insurance beneficiaries. Disputes may come from ambiguities in the policy documentation, conflicting claims by parties, or questions surrounding the policyholder’s mental state or intent at the time of designating beneficiaries.
One common problem involves poorly defined or incomplete beneficiary designations. For example, if a insured names “my children” as contingent beneficiaries without explicitly identifying them, disputes can arise over who qualifies as a "child." The failure to update contingent beneficiaries after major life events, such as a divorce, remarriage, or the birth of additional children, can lead to long disputes, due to competing claims to the proceeds. Another frequent issue concerns allegations of undue influence or fraud. In some cases, surviving family members may argue that the policyholder was coerced into naming certain individuals as contingent beneficiaries.
Contingent beneficiaries also become central to disputes when the primary beneficiary predeceases the insured, and no clear plan is in place for distributing the proceeds. This scenario can lead to conflicts between contingent beneficiaries and the estate of the insured, particularly if the policyholder failed to designate specific individuals or if the contingent beneficiaries themselves are deceased or otherwise ineligible. The role of contingent beneficiaries can be further complicated by state laws and policy-specific provisions. Some jurisdictions impose mandatory procedures for notifying beneficiaries and filing claims, and failure to comply with these requirements can result in forfeiture of rights. Insurance companies, in turn, may face lawsuits for mishandling claims or delaying payments while disputes are resolved.
Our life insurance lawyers handle beneficiary disputes and interpleader lawsuits. We have handled disputes from many life insurance companies such as: Mutual of Omaha; Mass Mutual; Globe; Prudential; and more.