Power of attorney for insurance purposes can mean any of several different things. Renowned national life insurance attorney Chad G. Boonswang explains everything you need to know about power of attorney in life insurance.
If you are having trouble getting your payout due to a power of attorney, or your life insurance claim was denied due to a power of attorney, call the experienced life insurance lawyers at Boonswang Law for help. We have helped beneficiaries nationwide get the payout they are due. Put our experience to work for you.
What Power of Attorney Is
“Power of attorney” is the term used for an estate-planning document granting authority to someone to make legal, financial, or medical decisions on your behalf. The power of attorney may be temporary or permanent.
Power of Attorney Varies from State to State
As a legal document, state law governs a power of attorney and the law varies from state to state. If you seek to draft a power of attorney, be sure to consult with a wills and estate attorney for help in drafting a document that conforms to the law in your state and is binding.
How Power of Attorney Works with Life Insurance Claims
Depending upon the laws in your state, someone with power of attorney may have the authority to do a number of things for a life insurance policyholder, including:
- Purchasing life insurance coverage
- Paying life insurance premiums
- Renewing life insurance coverage
- Life insurance coverage conversion
- Changing life insurance beneficiary designations
- Creating a life insurance trust
A person with power of attorney has a fiduciary duty to act in good faith and in the best interests of the person granting power of attorney. Often, the person with power of attorney is also the life insurance beneficiary, as in the case of married couples.
The power of attorney ceases upon death: therefore, a person with power of attorney of a policyholder who dies no longer has the authority to act for that policyholder. Whomever is named as the life insurance beneficiary receives the death benefit at that point.
Power of Attorney & Beneficiary Designations
Someone with power of attorney may have the authority to change beneficiary designations on behalf of the policyholder but he or she is disallowed from naming themselves a beneficiary. They must submit their power of attorney document to the life insurance company along with the beneficiary designation change form.
Someone with limited power of attorney may not have the power to change beneficiaries even if permitted to do so under state law. If they do have the authority to change beneficiary designations, they may do so up until the policyholder’s death, unless the policyholder designated an irrevocable beneficiary such as in divorce judgments regarding life insurance and spousal support court orders regarding life insurance.
Power of Attorney Rights
The rights of a person holding power of attorney varies state to state and according to the particular document the policyholder executes.
General power of attorney usually grants someone the authority to make all decisions on behalf of someone else. Medical power of attorney grants the authority to make all medical decisions on behalf of the policyholder, but not other decisions such as financial decisions. Durable power of attorney grants someone the right to make decisions on behalf of another if they should become incapacitated. Limited power of attorney grants someone the authority to act on behalf of another in a specific instance.
Someone with power of attorney can only change life insurance beneficiaries if permitted to do so under state law and by the power of attorney document the policyholder executed.
A life insurance company should not delay payment or deny payment to a named beneficiary based on power of attorney documents alone, but this does often happen.
How a Life Insurance Lawyer Helps Navigate Power of Attorney
If your life insurance claim is delayed or denied based upon power of attorney, call us for help. We have seen claims denied due to improper beneficiary changes by the person with power of attorney. Also, life insurance representatives are not as familiar with the law regarding power of attorney as they should be, and they have paid out based upon power of attorney documents rather than the named beneficiary.
Don’t take no for an answer! If someone with power of attorney caused a delay in your life insurance claim or caused your life insurance claim denial, we can help you with your life insurance claim denial appeal or your beneficiary dispute interpleader action. If your life insurance claim was denied due to lapse because the power of attorney failed to pay premiums, you may have legal recourse against them. Call us today to discuss your claim, free of charge.