How to Dispute a Change of Beneficiary on a Life Insurance Policy
Disputing the change of beneficiary for a life insurance policy is usually difficult, but there are circumstances under which it can be done. Generally speaking, the insured person is considered to be the owner of the life insurance policy and can designate whomever she chooses to be her beneficiary. Provided the correct paperwork is completed, the owner can change the beneficiary at any time and for any reason.
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Instructions
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Raise an objection if you know about a change at the time it occurs during the insured's lifetime, and make sure you document your intervention. You can do this both with the insured and with the insurance company. This may or may not be successful, but it does begin a paper trail that you can use to maintain your claim once the policy begins to pay out.
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File a rival beneficiary claim with the insurance company. More often, controversial changes of beneficiary come to light only after the death of the insured, when the claim is first made. Your rival claim can occasionally be resolved by arbitration, but it will more likely end in a court case. The insurance company will not be a party to the suit. Usually when a rival claim is filed, the company will begin paying the benefits into a trust until the courts resolve the matter of who is the proper beneficiary.
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Study a copy of the policy for any ambiguous language (such as "spouse," without naming the specific person). Also look for any other paperwork or correspondence that might show that the change of beneficiary was contrary to the insured person's true wishes. You're really attempting to prove that either a fraud was committed, the insured was under coercion or duress when the change was made, or that a clerical error prevented her true wishes from being recorded. Merely asserting that the insured made a mistake or forgot to make a subsequent change to the beneficiary will not be sufficient. The benefit of the doubt is always in favor of the named beneficiary in these cases.
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Tips & Warnings
This is a complex area of the law, so it's advisable to consult an attorney who is a specialist and has previously dealt with such cases. He should be able to give you a good idea of how strong a case you have and whether it's advisable to proceed.
Both state and federal law can be invoked in this type of case, so be careful to determine which will be relevant to your situation.
The court process can be costly indeed---often, the attorney's fees can approach or overtake the value of the policy, meaning that the lawyers involved are sometimes the only ones to benefit from bringing an action of this kind.
