by Guest » Wed Aug 01, 2012 12:12 pm
My dad has expired two months back. We didn't know that his ex-wife had been the primary beneficiary of his life insurance policy. But we found out that she had expired 2 years ago. Can we claim the death benefit now that she is no more? Will it be counted as part of his estate now or that of his ex--wife?
Posted: Thu Aug 02, 2012 02:09 pm Post Subject:
Since she died first, the beneficiary will become the contingent beneficiary. The contingent beneficary may be named or unnamed. If it is unnamed the insurance contract probably addresses this issue in a way that is in accordance with state law.
Posted: Sat Aug 04, 2012 04:36 am Post Subject:
The contingent beneficary may be named or unnamed.
Really? With no named primary or contingent beneficiary, the ESTATE of the insured (if the owner of the policy) is the de facto beneficiary. If the owner of the policy is someone other than the insured, that person will likely be paid the policy proceeds by the terms of the contract, not state law.
All beneficiaries must be named -- primary, contingent, or tertiary -- or there is no beneficiary. Dying without a named beneficiary is almost the same as dying intestate.
Posted: Tue Aug 07, 2012 02:50 am Post Subject:
Dying without a named beneficiary is almost the same as dying intestate.
Mmm, now I'm going to go all Jurisprudence dork on your and pick a little fight. No.
Dying without a beneficiary designation has a very clear process of the life insurance proceeds, to the Estate. Dying intestates is a huge PITA for your heirs. The paperwork alone is enough to make you say "you know what, never mind."
Now it is very true that dying without named beneficiaries, and dying intestate is a major problem, especially if there's a lot of money and a lot of people happen to know this.
The petitions will be never ending.
Posted: Tue Aug 07, 2012 04:46 am Post Subject:
Dying intestates is a huge PITA for your heirs. The paperwork alone is enough to make you say "you know what, never mind."
It may or may not be . . . it depends on how complicated the estate is.
My point -- though not stated succinctly -- was that when there is no named beneficiary, the money usually goes to the estate (unlike the predecessor statement, "The contingent beneficary may be named or unnamed." which is just plain wrong) and there it may become subject to the claims of creditors (state probate laws may limit the exposure of the life insurance proceeds to general creditors). Dying intestate does essentially the same thing -- it exposes estate assets to the claims of creditors, and ahead of those of heirs, and the life insurance could be one of those assets attacked by the decedent's creditors.
Naming beneficiaries, primary or contingent, and making sure they are always up to date, is the only sure way to protect the life insurance proceeds for those heirs.
Posted: Tue Aug 07, 2012 07:57 am Post Subject:
Hi,
A person has taken a life insurence plan. He died then primary beneficiary will claim for it. If in the case primary beneficiary is also died then who will claim for it.
Posted: Tue Aug 07, 2012 08:13 am Post Subject:
Really? With no named primary or contingent beneficiary, the ESTATE of the insured (if the owner of the policy) is the de facto beneficiary. If the owner of the policy is someone other than the insured, that person will likely be paid the policy proceeds by the terms of the contract, not state law.
All beneficiaries must be named -- primary, contingent, or tertiary -- or there is no beneficiary. Dying without a named beneficiary is almost the same as dying intestate.
The defacto beneficiary is the same as the unnamed beneficiary.
If the defacto beneficiary is the estate, this is the same as naming the estate. If the defacto beneficiary is the policy owner, it is the same as naming the policy owner.
Yes, it will be paid based upon the contract, but the contract won't go against state law.
It's nothing at all like dying intestate.
Posted: Tue Aug 07, 2012 08:56 am Post Subject:
The defacto beneficiary is the same as the unnamed beneficiary.
Bull@@@@! That's not what you wrote and that's not what you meant. This is your favorite trick of parsing your responses. When the primary beneficiary space on an insurance application is left blank, or is later rendered "blank" by virtue of the death or disqualification of the primary beneficiary, it means the same thing as "my estate" -- that's what a de facto beneficiary is . . . WHEN THERE IS NO NAMED CONTINGENT BENEFICIARY. Occasionally, a policy might also describe the policyowner or their estate as the de facto beneficiary when there is no surviving primary or contingent beneficiary.
You're an intelligent guy, but this time, you are just plain wrong. Or confused. [I'll leave parsing that up to you.]
The estate is NOT an "unnamed contingent" beneficiary. The definition of "contingent" beneficiary is the person selected by the policyowner to whom the life insurance proceeds are paid if there were no surviving primary beneficiary.
Yes, it will be paid based upon the contract, but the contract won't go against state law.
Really? Try litigating an insurance case sometime. And try litigating an ERISA case. Stuff ends up in contracts that courts overturn all the time. The state approves contracts for sale, it does not approve the contents of the contract, per se. I testified about that and against an expert witness (who happened to be a former state Insurance Commissioner and former leader of the NAIC) who testified otherwise.
You're confusing beneficiaries with owners. The contract will NOT specify a contingent beneficiary, but it might specify a default owner if the policyowner (who is not the insured) dies. It could say the new policyowner is the estate of the former policyowner, or it could state the new owner is the insured. The contract has to identify and provide for continuity of ownership. And in third party ownership (a very small percentage of individual policies outside the corporate world), a policyowner or the policyowner's estate might be in line ahead of the insured's estate and heirs in an even smaller percentage of contracts. But the estate is not an "unnamed contingent beneficiary", it is simply the last place the policy proceeds can go. Once there, the distribution will be governed by state probate law, not the Insurance Code, emotion, sound reasoning, or the needs of heirs.
There is sometimes a "facility of payment" provision in group life and industrial insurance (never in ordinary [individual] insurance), however, that permits the insurer to pay the proceeds to the spouse or another person per stirpes to pay life insurance proceeds to by name in the event there is no surviving primary beneficiary. This does not make the spouse or another person a "contingent beneficiary". It substitutes that person for the primary beneficiary when none is named or survives (or the primary is disqualified by law).
This provision is not found in ordinary (aka: individual) life policies because the persons who purchase individual insurance -- and their agents -- generally understand the need to name a beneficiary. In group insurance, many employees mistakenly assume their spouse or their parent is automatically their beneficiary, and they don't name one. Although per stirpes would literally bypass the spouse, its application generally is used only when there is no spouse, and would permit payment to a child (or children) of the covered employee. [ERISA also controls this particular matter, not state law, when the group policy is issued to an employer with more than 20 employees, and it would preempt any facility of payment language in the contract, which is why you generally don't find it there in policies issued after 1974.]
Posted: Thu Aug 09, 2012 05:35 pm Post Subject:
I stand behind most of what I wrote.
I do agree with you on one point.
"Yes, it will be paid based upon the contract, but the contract won't go against state law."
It shouldn't go against state law, but you are 100% correct that this does happen sometimes.
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