Does a Life Insurance Policy have to go through Probate?

Generally speaking, no.

Usually, life insurance death benefits are paid out directly from the insurer to the beneficiary or beneficiaries without going through probate. Life insurance is not part of the insured’s estate and is not subject to debt collection, payment of the insured’s bills, or taxation as inheritance.

However, there are circumstances under which the death benefit from a life insurance policy is transferred to the insured’s estate rather than to a beneficiary. Under these circumstances, the life insurance proceeds will be subject to the probate process.

Having trouble with your life insurance claim because of a vague, invalid, or out-of-date beneficiary designation? Are you an ex-spouse entitled to the life insurance death benefit? Do you think you should be the beneficiary of an employer-provided life insurance policy? Call us for your free, no-obligation case evaluation.

Are life insurance proceeds considered part of an estate?

No. Life insurance death benefits pass to beneficiaries by operation of state law, not through the insured’s estate. Keep in mind that a will does not supersede a beneficiary designation in life insurance.

Are life insurance proceeds public record? No.

How do life insurance proceeds end up in the decedent’s estate?

When is Life Insurance Part of the Estate?

When there is an invalid or out-of-date beneficiary designation, or the designated life insurance beneficiary is deceased or cannot be found, the life insurance company pays the death benefit to the estate of the insured.

What happens when life insurance goes to the estate?

When there is no beneficiary on a life insurance policy, the life insurance beneficiary rules dictate that the death benefit will be subject to the probate process.

“Probate” refers to the process by which a deceased individual’s estate is distributed. The executor uses the deceased’s will to determine who are the beneficiaries entitled to a portion of the insured’s estate. If the deceased had no will, the estate is distributed according to the state’s laws of intestacy.

Unlike the process of claiming the death benefit as a beneficiary, which is streamlined and private, the probate process varies greatly state-to-state basis and is a matter of public record. And especially in the case of high-value estates, probate can be a heavily-litigated process, with multiple parties claiming conflicting amounts of the deceased’s assets.

Is the beneficiary of life insurance responsible for debt? Can life insurance proceeds be taken by creditors?

No, and this is one of the reasons going through probate is disadvantageous even if the estate value ends up being distributed appropriately.

If the insured was in debt at the time of death, their estate will first be used to pay off any outstanding debts. When the remains of the estate is distributed to the insured’s heirs, those proceeds may be subject to estate taxes. In contrast, if a beneficiary receives the insured’s death benefit directly from the insurance company, the beneficiary will receive the full amount without debt collection or tax collection.

Many states exempt a specified amount of life insurance death benefits (e.g. up to $50,000) from debt and/or tax collection even after the death benefits are transferred to the insured’s estate, but this depends on the laws in your state.

How an Insured Can Avoid Leaving the Death Benefit to Their Estate

It is in everyone’s best interests that an insured keep their beneficiary designations as up-to-date as possible to avoid probate, debt collection, creating a public record, and possible estate tax.

Designating multiple life insurance beneficiaries such as more than one primary beneficiary or a secondary or contingent beneficiary can provide an effective safeguard in case something happens to a primary beneficiary.

National Beneficiary Lawyer to Help You With Your Life Insurance Claim

Unfortunately, when there is a vague, invalid, or out-of-date beneficiary designation, or if the named beneficiary is deceased, there is frequently litigation over who is rightfully entitled to the policy’s death benefit. This litigation is called a life insurance beneficiary dispute. If the court determines that none of the litigants are rightful beneficiaries, the death benefit goes to the insured’s estate.

If you believe your life insurance claim has been wrongfully denied or that you are entitled to a death benefit that seems to be going to the estate instead, you need the advice of an experienced life insurance beneficiary lawyer. Call us – we get our clients paid!

Was Your Foreign Death Life Insurance Claim Denied?

Life insurance usually covers death while traveling internationally, but there are circumstances when it may not.

This article will explore the potential problems beneficiaries may encounter when filing a claim for death benefits if the insured happens to die abroad, how to solve those problems, what happens to life insurance if the insured moves abroad, and the instances when life insurance will not cover foreign death.

If you are a beneficiary and your claim for life insurance death benefits was denied or is delayed because the insured died while traveling overseas, call our life insurance claim lawyers. We can help you get paid.

Foreign Death Claims are Often Denied or Delayed

A “foreign death claim” occurs when an insured dies outside of the U.S.

If you fail to inform your insurance company of your foreign destination, the length of time you will be there, and what activities you will engage in while there, your beneficiaries’ claims may be denied due to your misrepresentation. At the very least, your beneficiaries’ claims will be delayed due to the life insurance company’s need to investigate.

Common Reasons a Foreign Death Life Insurance Claim is Denied

• Insufficient proof of foreign death
• Failing to disclose international travel/misrepresentation in life insurance
• Failing to disclose engaging in risky activities
• Suspect that the insured committed suicide
• Death due to Act of War not covered by life insurance
• Suspicious death

It is Challenging to Obtain the Required Proof of Death

If a life insurance policy has been in place for at least two (2) years, the insured should be covered if they pass away abroad. But before a life insurance claim is paid to the beneficiary of the policy, the life insurance company must obtain satisfactory proof of the insured’s death.

If the person died in the United States, a death certificate will suffice. Providing proof of death becomes much more difficult, however, when the person dies overseas. Customary practices, resources, and technology all vary greatly from country to country, which can preclude a country from recording a death in the same way that we do in the United States.

The Insurance Company Will Delay Paying Death Benefits to Investigate

It is common for insurance companies to ask repeatedly for more documentation or to delay paying a claim for death benefits because ostensibly they are investigating the foreign death.

One case our life insurance lawyers handled arose when the insured died in Ghana on a business trip. A two-year “investigation” commenced into his death, meaning, payment of death benefits to the beneficiary was delayed for two years. Because the insurer did not act in good faith in their “investigation,” in that they made no attempt to verify any of the many documents our client submitted, we got our client paid, at last – with interest!

Our Life Insurance Attorneys Will Help You Get Paid if Your Foreign Death Claim Was Denied

When life insurance companies are given foreign proofs-of-death or death certificates that look unusual compared to the U.S.’s death recording practices, they often allege that they are being victimized by people faking their deaths and will likely launch their own investigations, delaying payout. They may also deny foreign death claims due to alleged misrepresentation, suicide, or suspicious death.

If your foreign death claim was denied or your foreign death claim payout is delayed, we can help you. Call us for your free case evaluation. Our experienced life insurance beneficiary lawyers work on a contingency basis, meaning, there is no cost to you, and we do not get paid unless you do. Don’t take no for an answer!

While almost any life insurance policyholder has the power to change their beneficiary designation at any time, a last-minute beneficiary change may indicate fraud, duress, or lack of competence. That the beneficiary change was made shortly before the death of the insured should raise suspicions that the new beneficiary may have made the change, the new beneficiary may have pressured the insured into making the change, or the insured did not understand what they were signing due to Alzheimer’s or dementia.

This is a horrible situation for the intended beneficiary or beneficiaries because you will have to fight an uphill battle to show that the beneficiary designation was changed due to fraud, duress, coercion, or lack of competence. Our life insurance claim attorneys have helped many families get to the bottom of a last-minute beneficiary change and prove that the change is invalid.

Let our life insurance lawyers help you get paid the benefits that the insured always intended that you receive, not someone else. Contact us to schedule your free, no-obligation case evaluation. We will represent you on a contingent basis, meaning we do not get paid unless you do. You have nothing to lose and everything to gain!

HOW OUR LIFE INSURANCE ATTORNEYS CONTEST A LAST-MINUTE BENEFICIARY DESIGNATION

We’ve seen fraudulent beneficiary changes all too often. A frail elderly person is convinced to hand over power over finances and other decision-making to a new love interest, a caretaker, or a relative who then changes the life insurance beneficiary to themselves. We have also had cases where the insured was susceptible to coercion and was manipulated into making the beneficiary change.

You want to challenge a last-minute beneficiary designation change. Our life insurance lawyers can help you. First, know that every life insurance company does things differently. Next, know that state law governing these matters varies. For example, the life insurance beneficiary rules in NY differ from the life insurance beneficiary rules in Florida, the life insurance beneficiary rules in Texas, and the life insurance beneficiary rules in California.

Our life insurance beneficiary lawyers have helped beneficiaries of life insurance policies across the country get paid, and we can help you too.

OUR LIFE INSURANCE LAWYERS FIND WITNESSES TO THE BENEFICIARY CHANGE

Most beneficiary designation changes are required to be witnessed. We investigate to see if this change was indeed witnessed.

If not, the change is invalid. If so, we can then depose those witnesses and get information under oath about the circumstances surrounding the change.

OUR LIFE INSURANCE LEGAL TEAM INSPECTS THE BENEFICIARY CHANGE FORMS

Life insurance companies have their own forms, procedures, and requirements for making a beneficiary change. If a beneficiary designation form was completed incorrectly or contained a mistake, that can invalidate the change. If the requirements were not met or the insured did not follow the procedure in submitting the last-minute beneficiary change, that can also invalidate the change.

Common problems that invalidate the insured’s beneficiary change include:

• Mistakes on the beneficiary change forms;
• Misspelling of a beneficiary’s name or other errors in personal information;
• Beneficiary change forms not witnessed or notarized;
• Beneficiary change forms not sent to the correct address;
• Beneficiary change forms not received by the life insurance company before the insured’s death.

OUR LIFE INSURANCE ATTORNEYS REPRESENT YOU IN THE INTERPLEADER

An “interpleader” is a legal action that is initiated by the life insurance company when the new beneficiary and the removed beneficiary file a claim for the same death benefits, and the removed beneficiary challenges the change in designation.

The purpose of an interpleader is to determine who is the rightful beneficiary, and that is why an interpleader is commonly called a “life insurance beneficiary dispute.”

Both the new beneficiary and the removed beneficiary should have experienced life insurance beneficiaries representing them in the interpleader. The law is nuanced, and it can be difficult to prove that the insured did not have the requisite competence to change beneficiaries or that the insured was under duress or threatened or coerced to make the change.

REVOCABLE VS. IRREVOCABLE LIFE INSURANCE BENEFICIARIES

Most policyholders have a “revocable” beneficiary designation, which means they have the power to change their beneficiary designation at will and at any time. The only policyholders who are unable to change their beneficiary designation are those under a court order or an “irrevocable” beneficiary designation.

For example, as part of the property settlement agreement between divorcing parties, a family law judge might order that the support obligor maintain life insurance and name the support obligees as beneficiaries in order to guarantee that income stream. In some cases, the judge will order that the insured designate the support obligees as “irrevocable beneficiaries,” meaning that the obligor cannot “revoke” or change the beneficiary designation.

If the insured changed beneficiaries at the last minute and one of these circumstances applies, our life insurance lawyers can likely have that designation overturned.

CONTACT OUR LIFE INSURANCE ATTORNEYS TODAY FOR YOUR FREE CONSULTATION REGARDING THE LAST-MINUTE BENEFICIARY CHANGE

Are you considering contesting a life insurance beneficiary designation? Are you defending in a beneficiary dispute?

Our life insurance beneficiary lawyers have helped clients across the nation recover millions of dollars in death benefits to date. Let us help you. Whether you are the removed beneficiary or the new beneficiary, we will fight vigorously for your right to the death benefits. Contact us today.

You’ve probably heard of the Contestability Period, which is the two years following the purchase of life insurance during which a life insurance company can contest the beneficiary’s rights to the death benefit due to a misstatement or omission on a policyholder’s application for life insurance and medical questionnaire.

So what is an “incontestability clause?” Find out from the nation’s top life insurance lawyers at Boonswang Law. And if your life insurance company denied your claim or rescinded your coverage due to an alleged misrepresentation by the policyholder, call us. We will discuss your case with you free of charge. Our life insurance lawyers have gotten countless clients paid when their claim was initially denied due to misrepresentation.

Incontestability Clause Definition

An “incontestability clause” in life insurance is a policy provision that disallows a life insurance company from voiding coverage due to a misstatement by the policyholder after a specified period of time has elapsed since the policyholder purchased life insurance. This period of time is usually two years, but may be more.

How an Incontestability Clause Benefits Policyholders

Most life insurance policies include an incontestability clause, which closes the door on the contestability period and prevents life insurance companies from denying beneficiaries’ claims due to a misstatement or omission on the policyholder’s initial application for life insurance and medical questionnaire.

The incontestability clause helps policyholders realize their goal in purchasing life insurance, which was to make sure their loved ones got a payout in the event of their death. It also protects beneficiaries from any mistakes or omissions in the policyholder’s application for life insurance and medical questionnaire.

Exceptions to an Incontestability Clause

Life Insurance Fraud

If a policyholder fraudulently completed their initial application for life insurance and medical questionnaire, the incontestability clause will not protect them or their beneficiaries.

For example, if the policyholder intentionally lied about having a smoking habit and dies within the contestability period, the life insurance company will rescind the policy and beneficiaries’ claims for the death benefit. If the policyholder dies after the contestability period, when the incontestability clause is in effect, the life insurance company will still deny beneficiaries’ claims.

The definition of life insurance fraud varies from state-to-state. In many states, the life insurance company must show that the policyholder intended to deceive. The life insurance lawyers at Boonswang Law have over 30 years of combined experience helping life insurance beneficiaries get what they deserve in every state in the country. Call us for help if your claim was denied due to alleged fraud or misrepresentation.

Misstating Age or Gender

In some states, when the policyholder mistakenly recorded their age or gender on their initial application for life insurance, the life insurance company cannot void coverage. Instead, they must subtract what they would have been paid in premiums from the death benefit, and pay the death benefit to the beneficiary.

Purchasing Life Insurance When Deathly Ill

As a matter of public policy and to protect consumers from high premiums, life insurance companies are allowed to deny claims for death benefits during the first two years or coverage, called the contestability period, when the policyholder makes a misstatement or omits information on their initial application for life insurance and medical questionnaire.

The contestability period protects life insurance companies from having to pay death benefits when the policyholder was so ill when they applied for life insurance that they died shortly thereafter. It is this type of scenario, along with policyholders contemplating ending their own lives, that the contestability period was intended to cover.

Tolling the Contestabilty Period

If the policyholder becomes disabled shortly after purchasing life insurance coverage and within the contestability period, the contestability period is “tolled” or continued and an incontestability clause will not take effect.

Talk with an Experienced Life Insurance Lawyer

If your claim for death benefits was denied due to death within the contestability period or death under the incontestability clause but the policy was rescinded due to fraud or misrepresentation, call us for help getting your payout. We have helped life insurance beneficiaries across the nation get the payout their loved ones intended.

In some cases, the policyholder may have made a minor mistake and you can get the death benefit minus what the policyholder would have paid in premiums had they not made that mistake. In other cases, the policyholder did not make the alleged mistake or omission with the intent to defraud, such as when the policyholder does not disclose a medical condition they did not know they had.

In more cases than not, we are able to get our beneficiary clients paid when their claim for death benefits was initially denied due to death within the contestability period or death thereafter when the policyholder allegedly committed fraud. We only take cases on a contingency basis, meaning that we do not get paid unless and until you do. Call us for help – you have nothing to lose and everything to gain.

The Grace Period for Life Insurance Policies

Both policyholders and life insurance beneficiaries should know what the grace period is for making premium payments on a life insurance policy. Life insurance companies frequently make administrative mistakes and let policies lapse while still in the grace period. In these instances, coverage should remain in effect and the life insurance company should pay beneficiaries’ claims for the death benefit.

If your claim was denied due to policy lapse or termination, call us. Our life insurance lawyers investigate and find out whether the grace period was in effect and whether coverage remained in place at the policyholder’s death. Let us help you get paid.

What is the Grace Period on a Life Insurance Policy?

The life insurance “grace period” is the time following the premium due date that the policyholder has to pay the premium without negative consequences. Generally, the grace period will be 30 or 31 days following the premium due date, but this is specified in the policy documents for each life insurance policy.

Life insurance is highly regulated under state and federal ERISA law. Life insurance companies are required to provide a grace period for premium payments and to send notices regarding past-due premium payments to the policyholder. If the life insurance did not apply the grace period or cannot show that they sent the required notices to the policyholder, the lapse of the policy can be overturned.

What Happens When a Life Insurance Policy Lapses

If a life insurance policy lapses, life insurance coverage ends. This means that if a policyholder dies after their policy lapsed, the life insurance company will deny their beneficiaries’ claims because there is no coverage.

Life Insurance Denials Due to Lapse

Lapse is one of the most common reasons for life insurance claim denial. Unfortunately, life insurance companies often let policies lapse incorrectly, either by not applying the grace period for premium payments, not sending the required past-due notices or lapse notices, or not applying the disability waiver of premium.

In the case of employer-provided group life insurance, often employers do not administer the policy correctly and fail to give employees the forms to convert group coverage to individual coverage, or fail to process those forms.

Identifying Mistakes in a Lapsed Policy

Unfortunately, many life insurance policies lapse due to no fault of the policyholder. In cases where mistakes cause life insurance coverage lapse, we can often get our beneficiary clients paid when we appeal the life insurance claim denial.

If your claim was denied due to lapse, first, determine whether the life insurance policy was a group life insurance policy or an individual policy. Most individual policies are governed by state law, while group life insurance policies through an employer are governed by federal ERISA law.

In either case, a grace period applies to past-due premium payments. If the life insurance company allowed the policy to lapse during the grace period, the beneficiary on the lapsed policy can still get paid. Similarly, if the policyholder made a premium payment within the grace period but the life insurance company did not correctly apply that payment to their account, the beneficiary can still get paid. If the policyholder had flexible or vanishing premium payments and the life insurance company failed to administer that, the beneficiary can still get paid.

If the life insurance company cannot show that it sent the policyholder the required notices of past-due premium payments and notice of lapse, the beneficiary may still get paid. We had a case where the policyholder was in the hospital, not receiving their mail, the policy lapsed, and they died. We were able to get that beneficiary paid.

If the policyholder was eligible for disability waiver of premium payments and the policy lapsed due to non-payment, their beneficiaries may still get paid. We have had many cases like this and have gotten our beneficiary clients paid.

If an employer failed to give a separating employer the forms to convert group life insurance coverage to an individual policy, or failed to correctly process those forms causing coverage to lapse, the beneficiaries may still get paid. Again, we have had many cases where employers improperly administer coverage conversion causing policy lapse, and we have gotten our beneficiary clients paid.

Talk with a Life Insurance Lawyer if Your Claim Was Denied Due to Lapse

Don’t take no for an answer if the life insurance company denied your claim due to lapse. Keep in mind that life insurance companies are for-profit companies, and they only make money when they collect premiums and deny or delay paying beneficiaries’ claims. For this reason, they have little incentive to avoid making mistakes or to check for mistakes in denying beneficiaries’ claims.

Let us check for mistakes for you. We thoroughly investigate each claim, and if the lapse in coverage was not the policyholder’s fault, we can get you paid. We take cases on contingency only to minimize costs to you, and we only get paid if you do. Call us to discuss your case, free of charge.

Usually life insurance companies take 30-60 days to process a beneficiary’s claim for death benefits, but often payouts get delayed. This article explains the various circumstances under which a life insurance may reasonably delay paying your claim.

If none of these reasons seem to apply to your claim, contact the experienced life insurance lawyers at Boonswang Law. We have helped thousands of life insurance beneficiaries nationwide get their payout, and we can help you too. You may even be entitled to interest on your claim for death benefits due to the delay! Call us today to discuss your claim – free of charge!

Why Life Insurance Companies Delay Claims

Life insurance companies can reasonably delay paying life insurance claims for the following reasons:

• Investigation of the insured, death within the contestability period
• Late-filed death benefit claims
• The insured died as a result of homicide
• Missing documentation
• The beneficiary changed shortly before death
• Unclear beneficiary designation
• The primary beneficiary has died, and there are not two primary beneficiaries
• The policy has no beneficiary
• There is a beneficiary contest

Reasons a Life Insurance Claim Delays

The Insured Died During the Contestability Period

If the insured dies within the first two years of the policy term, called the “contestability period,” the life insurance company has the power to investigate the insured’s responses to the questions on the initial application and medical questionnaire. This investigation can delay the beneficiaries’ payout.

If an investigation shows that a fact was omitted or is untrue on the insured’s application for life insurance or medical questionnaire, the life insurance company has the power to rescind the policy – meaning, the policy gets cancelled as if it never existed. Life insurance rescission exists as a matter of policy to deter those applying for life insurance to lie to get a lower premium payment. However, many times, innocent mistakes are harshly punished with rescission and the beneficiaries get nothing.

In cases of rescission, we are often able to get our beneficiary clients paid by showing that the insured had no intent to deceive, or by showing that the omitted or mistaken fact had nothing to do with the insured’s cause of death. In these cases we often settle with the life insurance company for the amount of the death benefit minus what the insured would have paid in premiums had the life insurance company known of the omitted or mistaken fact.

If your life insurance claim is being delayed or was denied due to alleged misrepresentation and life insurance policy rescission, call our experienced life insurance attorneys for help. Do not take no for an answer!

Click here if the policyholder died after the contestability period.

The Beneficiary Files a Claim Late

If there are multiple beneficiaries and one does not file their claim at the same time as the others, that delays payment of the other’s claims. Also, if a beneficiary takes months or even years after the death of the insured to file their claim, the life insurance company will take time to look into it.

Death Due to Homicide

If the insured was murdered, the life insurance company will wait to pay a claim until the beneficiary gets cleared of the crime by police. This often delays the payout, as a murder investigation can take some time.

Inaccurate or Insufficient Documents

If the beneficiary does not submit a death certificate, or does submit a death certificate but it does not contain the information the life insurance company requires, this delays payment of beneficiaries’ claims. 

Delay in payment of death benefits is frequently a problem when the insured dies overseas. Foreign documents that do not contain the same information as a domestic death certificate will be insufficient proof of death for the insurance company. Often, a beneficiary has to go back and forth with the foreign government involved to try to get the insurance company the documentation they need.

If your claim is being delayed because the insured died in a foreign country, call us. Our experienced life insurance attorneys help you get what you need to get your payout.

The Beneficiary Changed Shortly Before the Insured’s Death

If someone challenges an eleventh-hour beneficiary designation due to duress, fraud, or lack of competence, the life insurance company will delay paying any claims until confirming the rightful beneficiary.

Vague Wording Designating Beneficiaries

Those with life insurance must be very specific when naming beneficiaries, otherwise problems arise identifying them and there will be a delay in payment until they get identified.

For example, Frank has a life insurance policy and dies within the policy term, leaving 2 children from a previous marriage, one out-of-wedlock child from a brief relationship, and another child from his second marriage. Frank calls his second wife’s son his son, but he has not formally adopted that child.

Frank designates “all of my children” as his life insurance beneficiaries. Who does he mean? All four children? Not the one born out of wedlock? Not his second wife’s son? You can see how problems arise. 

The Primary Beneficiary has Predeceased the Insured

When the primary beneficiary dies before the insured, the proceeds pay out to the secondary or contingent beneficiaries. Identifying and locating these beneficiaries can delay everyone’s payout.

The Policy Lists No Beneficiary

If the primary beneficiary predeceases the insured, there are not two primary life insurance beneficiaries, and there are no secondary or contingent beneficiaries, the death benefit will likely pay out to the insured’s estate. If the insured intended to change the beneficiary but did not complete the process, this will also delay payment of death benefits until the rightful beneficiary gets identified.

If the insured lived in a state that has a  life insurance evocation-upon-divorce statute and failed to update the beneficiary designation to someone other than the ex-spouse, then there is no beneficiary and the death benefits pays to the insured’s estate.

There is a Beneficiary Contest

If someone challenges the beneficiary designation for any reason, that will delay payout until the rightful beneficiary gets identified. Life insurance beneficiary disputes happen when:

• The insured changed beneficiaries just before death under duress
• The insured changed beneficiaries just before death lacking competence
• Someone other than the insured changed the beneficiary designation
• The insured changed an irrevocable beneficiary designation
• The insured failed to name an ex-spouse as a beneficiary per a court order
• There is evidence that the insured intended beneficiaries but did not complete the process
• The insured failed to name a spouse or ex-spouse as a beneficiary in a community property state

If you are a life insurance beneficiary and someone is challenging that designation, call us. We can help you defend your position. Similarly, if you think you should be a life insurance beneficiary but are not, we can help you contest the beneficiary designation.

How to Speed Up a Life Insurance Claim Payout

• Have the Death Certificate Ready
• Contact the Life Insurance Company as Soon as Possible After the Death of the Insured
• Include All Required Documents When You File Your Life Insurance Claim

How a Life Insurance Lawyer Helps

The experienced life insurance lawyers at Boonswang Law will discuss your claim with you, advise you as to your rights to the death benefit, and if you are entitled to get a payout, negotiate with the life insurance company to get your payout and if necessary, litigate against the life insurance company.

We take life insurance cases on contingency only, meaning that we do not get paid unless and until you do. Trust us to handle your life insurance claim. Call us today at 1-855-553-9010 for your free consultation.

Learn from the nation’s top life insurance lawyers where death benefits go when there is no life insurance beneficiary or the beneficiary predeceases the policyholder.

If you are an heir of a policyholder who did not list you as a beneficiary, we may be able to help you. Call us for your free, no-obligation consultation.

What a Life Insurance Beneficiary Is

A life insurance beneficiary is a person or entity named by the policyholder to receive the death benefit if the policyholder dies within the policy term.

A policyholder may name an individual, a business, a trust, or a non-profit as a beneficiary. Usually the beneficiary must be identified by full legal name, residential address or place of business, and social security number or tax identification number.

Why Designating a Life Insurance Beneficiary is Important

If a policyholder fails to list a beneficiary or fails to keep their beneficiary designation up to date, the death benefits will not go to the person or entity they intended.

If a policyholder is going to the expense and trouble of purchasing life insurance, they must take care to name a primary beneficiary as well as secondary or contingent beneficiaries in order to ensure their intent is realized upon their death. A policyholder should also update their beneficiary designations if they marry, divorce, their relationships change, or if any of their beneficiaries die.

What Happens if a Life Insurance Policy Doesn’t List a Beneficiary

Although it might seem unusual, as the entire purpose of having life insurance is to make sure loved ones receive the death benefit, sometimes a policy does not list a beneficiary. This can happen when the policy is very new, the beneficiary designation is in the process of being changed, or the policyholder attempts to change or partially completes the change of beneficiary and suddenly dies.

If the policy does not list a beneficiary, the death benefits will pay to the policyholder’s estate. An “estate” is the sum of all of the policyholder’s assets upon their death and is administered by an executor.

Why You Don’t Want You Death Benefit to Go to Your Estate

If a life insurance policy pays to the policyholder’s estate, the death benefits will be subject to the claims of the policyholder’s creditors. Those creditors may include medical professionals and hospitals or hospice for end-of-life medical expenses, credit cards, and other personal debt of the policyholder.

The executor must pay these bills before the policyholder’s heirs receive any inheritance from the estate. The policyholder’s heirs will therefore inherit less money than they would have if the policyholder had named them as life insurance beneficiaries.

Who Receives Payment if a Beneficiary Dies Before the Policy Holder

If the primary beneficiary dies before the policyholder, the secondary or contingent beneficiary or beneficiaries receive the death benefit. If the policyholder failed to name secondary or contingent beneficiaries, or the secondary or contingent beneficiaries also died before the policyholder, the life insurance company pays the death benefit to the policyholder’s estate.

Talk with an Experienced Life Insurance Lawyer Today

Life insurance payout can get complicated when there is no beneficiary. If your loved one died, had life insurance, and there is no life insurance beneficiary or the beneficiary designation is unclear, talk with the life insurance lawyers at Boonswang Law to discuss your case. We’ve helped thousands of clients get the payout their loved ones intended, and we can help you too.