Life Insurance Interpleader Actions: What To Know About These Proceedings
Life insurance claims don’t always unfold in a straightforward manner. When competing claims arise for the life insurance proceeds, the insurance company is not in a position to determine the rightful beneficiary(s). To avoid paying the benefit to the wrong parties, the company files what is called an “interpleader action” with the court and deposits the proceeds with the court until the matter is resolved. The life insurance company then steps aside and lets the competing beneficiaries work things out through the court system.
If you have been served as a party in an interpleader action, or if you’re seeking to obtain proceeds from a life insurance policy that is subject to an interpleader, swift action is essential to protect your right to make a claim and receive benefits. Generally, the person served must timely file an Answer; and in some cases a cross-claim may be appropriate. Disability Insurance Law Group provides guidance on how best to move forward with your claim in the interpleader action makes sure our clients obtain all life insurance benefits to which they are entitled.
Common Grounds For Disputes Over Life Insurance Proceeds
Disputes over life insurance proceeds can arise for many reasons. Some of the most common include:
- Lack of capacity: The policyholder didn’t have the mental capacity to designate or change the beneficiary. Lack of capacity may be due to illness, dementia, catastrophic brain injuries or other factors.
- Undue influence or duress: If a beneficiary improperly influenced or forced the policyholder to designate them as the beneficiary, that may be grounds to invalidate their claim to the life insurance proceeds.
- Divorce or ERISA preemption: When an ex-spouse is still listed as the beneficiary, their claim be invalidated due to divorce. With life insurance policies that are subject to the Employee Retirement Income Security Act of 1974 (ERISA), preemption issues may also arise.
- Homicide: In these tragic cases, the beneficiary cannot recover life insurance proceeds if they played a role in the policyholder’s death. Note that criminal charges or a conviction aren’t necessary to pursue these claims.
As you can see, these issues are often complex, requiring in-depth evidence to sort out whether the named beneficiaries should rightfully receive the policy proceeds. Experienced legal representation is necessary for supporting your claim.
Work With A Legal Team That Understands The Intricacies Of These Cases
We can answer all your questions and advocate for your rights through all stages of the interpleader action. Our attorneys are deeply familiar with the nuances of life insurance law and interpleader actions. Here, your rights are in good hands.
To learn more, call 954-989-9000 or reach out online to schedule a free initial consultation with a member of our firm.