Life insurance policies usually name a beneficiary, which means that the policyholder listed a specific person to receive the distribution of the policy at their death. It can be a straightforward process, and in most cases it’s fairly quick. The proceeds of the life insurance do not need to go through probate, which means that they should be directly distributed to the named beneficiary. There’s no court process of judicial approval required.
Disputes can arise, however, about who the correct beneficiary is or whether the policy can be distributed at all. If you are unable to get the proceeds of a life insurance policy that you believe is yours, you should take legal action sooner rather than later. Get an attorney to help you with this. You should be able to find someone who can work on a contingency basis, which means you won’t have to pay any legal fees until it’s over. And if you don’t win the case, there’s no fee.
In addition to finding an attorney experienced in life insurance issues, locate a copy of the policy. Eventually, it might be necessary to find payment records to prove that the policyholder made all required payments. One reason distribution can be denied is because the policy wasn’t paid or it was cancelled. At least this is what the life insurance company might tell you. Do not take their word for it. They don’t have much to lose by telling you that you can’t collect on the policy, so they might deny your request on a technicality. In some cases, there has been outright fraud. The insurance company makes more money the less it has to pay out. So it’s not a surprise that they are encouraged to pay out as little as possible.
A will or trust does not affect a life insurance policy in most cases, because life insurance is not part of someone’s estate (which goes through probate). There are exceptions, however. If the policy holder did not name a beneficiary, or if a named beneficiary is deceased and there is no contingent or alternate beneficiary listed, then the proceeds of the life insurance policy can be distributed to the estate. If this happens, that money will go through the probate process.
Again, the sooner you act on a life insurance collection problem, the better. If you’d like our help in finding an attorney who would investigate a case and sue on your behalf, please contact us. The call is always free and confidential and you don’t pay anything unless you win.