by urslewis5 » Tue Dec 24, 2013 07:22 pm
I'm in the state of Ohio & this is something of a ball of confusion to me, my story & questions are... It was told to our family by another family member that my oldest brother who took command of caring for our mother & grandmother cashed in their policies for face value after he got power of attorney over them & this was done before there was a fire at her residence, so we had no way of knowing who to contact about insurance when they died, now 10 yrs. after my mother's death & 4 yrs. after my grandmother's death I received a notification of benefits on my grandmother's policy that I didn't know existed, so I applied for it & received payment. Once again another yr. later I received another notice & after contacting the company I find out that my grandmother had another policy & my mother was 1st beneficiary & I'm I guess the second, but my mother died way before my grandmother & as there was no probate made when either past... it will go to next of kin which is her only sister & her daughter (my cousin) has put great distance between her & I (we were really close) & pushed to get her labeled with Alzheimer's, if she dies before this claim can be completed who gets these funds?
Posted: Sun Dec 29, 2013 02:12 am Post Subject:
Your tale has too many twists to keep the story straight.
If a named beneficiary has died prior to the insured, then a contingent beneficiary moves into first position. If there are no contingent beneficiaries, then the proceeds go to [the estate of the policyowner.
It's even more complicated when large extended families are involved and the decedent dies intestate. Life insurance is intended to be a non-probate asset, but when it ends up in th estate, if's up for grabs along with everything else. Creditors may end up getting everything in a worst case scenario.
If proceeds are payable to the estate, then probate law governs the distribution of that asset. In reality, all of the assets are pooled for distribution. Probate law normally distributes an estate's assets according to the "per stirpes" rule -- dividing money/property between the decedent's children or siblings first, parents second, grandparents third, then aunts, uncles, and cousins.
Things do not usually make it to cousins, unless their parent (the aunt or uncle of the decedent) has also predeceased the decedent.
Everything is doled out according to bloodline. Spouses of kinfolk are not in the distribution pattern. So the wife of a deceased child or sibling is not entitled to that person's share, but the children of a deceased child or sibling are.
Posted: Sun Dec 29, 2013 04:15 am Post Subject: What happens if next of kin dies before claim is completed?
Now you see how confused I felt when this all took place because I was left to take care of everything... as well as how I feel now that this has began to unfold!
Let me try to streamline it a bit because I'm not understanding your response either!
I found out my grandmother (who has only 2 children - my mother & my aunt) had another policy & listed my mother as 1st beneficiary on that policy, the Rep. I spoke to on the phone said to me that I was second (which I assumed that meant 2nd beneficiary)... that's all she said before she said that my mother was 1st beneficiary, once I told her my mother was deceased & years before my grandmother & neither had a probate account, she said it would go to the next sibling as "next of kin"... which is my Aunt (the only living sibling). And if I'm listed as 2nd what happens to the other amount if my aunt who is sick doesn't make it before I get all the forms & get them completed... "the cousin is the daughter of my Aunt", not their cousin!!! who is telling me how sick my Aunt is... So what I want to know is who gets the benefits if she as next of kin dies before claim is completed?
What is a contingent beneficiary? And what's the difference between a contingent beneficiary & a second beneficiary?
Posted: Sun Dec 29, 2013 10:21 am Post Subject:
You wrote
she said it would go to the next sibling as "next of kin
I previously wrote
Probate law normally distributes an estate's assets according to the "per stirpes" rule -- dividing money/property between the decedent's children or siblings first,
You wrote
And if I'm listed as 2nd what happens to the other amount if my aunt who is sick doesn't make it before I get all the forms & get them completed.
andwhat's the difference between a contingent beneficiary & a second beneficiary?
Normally a "secondary" beneficiary means contingent beneficiary.Without a copy of the policy, it is not clear why the insurance company has told you the payment will go to your Aunt. If you were the "contingent beneficiary" then you should have been elevated to primary at the death of your mother, and should be in the position to receive the policy proceeds.
Something is wrong if the insurance company now says the claim is payable to your Aunt as "next of kin".
So what I want to know is who gets the benefits if she as next of kin dies before claim is completed?
If a clam is payable to a living person, but that person dies before the claim is paid, the money is payable only to the estate of that now-deceased person. It is not payable to anyone else by name until parceled out by the Probate Court.You may be filing a "competing claim" for the policy proceeds which would screw-up everything and force the insurance company to send the matter to federal court in what's called an "interpleader" action. That means the insurance company incurs legal expenses, and everyone else does too. All of the legal expenses could end up eroding the death benefit to nothing.
If your Aunt really does not have a claim, and the insurance company pays the proceeds to her anyway, you could have to sue the insurance company and force them to pay you a second time.
This is all very confused. I don't believe you have a clear understanding of the situation. I know I don't, and I'm the person with insurance licenses.
Before you file your claim for the policy proceeds, you need to know EXACTLY what the situation is. If you are not entitled to the proceeds, you don't want to file a claim. If you are, then you definitely want to file a claim.
Your matter should not become an open discussion in a public forum like this. If you want more detailed information or want me to get involved with the insurance company in my capacity as a Life & Disability Insurance Analyst as your representative, please send me an email with your contact information by clicking on the link below, and I will contact you ASAP.
Add your comment