Beneficiary Change

[Governor]

What is the name of your state (only U.S. law)? SC.

If you examine the AIG Life Insurance, Change Of Beneficiary Form:

http://www.integratedwealthcare.com/docs/resources/American General Change of Beneficiary form.pdf

Then it seems that if a person John Doe is named as the new primary 100% beneficiary, that same person cannot sign the box at the bottom as a witness.

Furthermore, if another person is named as a contingent beneficiary, then their SSN must be provided on the form.

My questions are:

If a change of beneficiary form was submitted that listed a wife as the new 100% primary beneficiary (it was originally two children) and the children listed as contingent beneficiaries 50% each, BUT

a) The wife signed as witness
b) The form failed to include SSN of the children.
c) The owner is now deceased and the insurance paid out.
d) The change form was submitted a few months before the owner died, the owner knew at that time that they were terminally ill.

Do the original beneficiaries have a legal right to the insurance?

Has the new primary beneficiary commited fraud?

Can the original primary beneficiaries force AIG to provide copies of the change form?

What action specifically can the original beneficiaries take to correct the error?

Have AIG actually done somet6hing wrong, or do they have a right to accept the form that has been completed in this way?

My research indicates that the form should never have been accepted, and that AIG must revert to the original status for the policy and privately pursue the money that they have incorrectly paid to the wife.

Any info on how to progress this will be much appreciated.

 

[Dandy Don]

What is the payout value of the policy?
Insurance was paid to who--the surviving spouse?
Did you inform the insurance company of any objections you had BEFORE the payout was made?

You say "it SEEMS that the same person cannot sign the box at the bottom as a witness" but that may be an incorrect assumption--there is nothing on the form or on the instructions that specifically says this. There is nothing wrong with a wife being a witness to a document her husband wants IF THIS IS TRULY IN FACT his wishes to change the beneficiary designation to provide for her.

Since the children were not being paid as primary beneficiaries there is no need for their SSN to be on the form.

Unless you are contending that she committed undue influence on him to persuade him to do something that he was unable to do on his own (suffering from a disease or medication that would have affected his mental capacity), then it's too late to do anything about this now.

How do you know that the form failed to include an SSN for the children if you don't already have a copy of it? Did he also leave a last will and testament that was probated in court that you all were named as beneficiaries in?

DANDY DON IN OKLAHOMA ([email protected])

 

[Governor]

I appreciate your comments, but you have failed to study the form.

1. Section 2.B (Contingent Beneficiary) has a column for SSN, why do you think this is optional?

2. The instructions, section 4. describes who must sign and this includes the witness. The primary beneficiary is (if you read the list) disqualified from signing since the primary beneficiary cannot (by definition) be a disinterested third party.

The value of the payout is irrelevant.

Obviously I have discovered these discrepances AFTER the fact, because the policy change did not become apparent until after the owner of the policy died, so how could an objection be raised before the payout?

It is also common practice with life insurance that the witness to a change of beneficiary cannot be the new primary beneficiary (read the instructions 4.)

Thanks

 

[JustAPal00]

I appreciate your comments, but you have failed to study the form.

1. Section 2.B (Contingent Beneficiary) has a column for SSN, why do you think this is optional?

2. The instructions, section 4. describes who must sign and this includes the witness. The primary beneficiary is (if you read the list) disqualified from signing since the primary beneficiary cannot (by definition) be a disinterested third party.

The value of the payout is irrelevant.

Obviously I have discovered these discrepances AFTER the fact, because the policy change did not become apparent until after the owner of the policy died, so how could an objection be raised before the payout?

It is also common practice with life insurance that the witness to a change of beneficiary cannot be the new primary beneficiary (read the instructions 4.)

Thanks

You don't have the change form that was submitted, so it may have been complete. If you're certain that an error was made, then call a lawyer and sue AIG. You will have to pay out of pocket first, but if you're certain you will win then do it. First I would contact the State insurance comission to see if the stipulations on AIG's form are law, or just their requirements.

 

[Dandy Don]

What a shame that you are trying to twist the facts to conform to your ideal hoped for scenario that will never happen.

A contingent beneficiary only gets paid if the primary beneficiary is not alive, so it would have been nice if the contingent's SSN would have been provided and it was an omission, but not needed because primary beneficiary is still alive.

Your comment about a "disinterested third party" does not apply in this particular instance and has no bearing to anything in this situation. There is NOTHING specifically in writing that states a primary beneficiary is disqualified from signing anything.

 

[Governor]

Thanks for your reply.

What facts are you accusing me of 'twisting'? and what is my 'hoped for scenario'? I don't think my posts thus far fit such a description or allude to any expected results.

I am aware of the circumstances under which a contingent beneficiary may claim and be paid, I have no question about that.

I did summarize for you how the form had been completed and included the missing SSNs as a noteworthy omission, of course a Judge may or may not attach significance to it, but I see nothing in the form to justify your implication that the SSNs are optional.

Now if you care to print and read the form, let me walk you through it.

Section 4, of the form has a second signature line, that line is clearly marked as being the signature of either:

a) Co-owner
b) Assignee
c) Witness

That is to say the signature appearing there represents one of these designations.

Now the signature of the person in our case, is not a co-owner nor is it an assignee, therefore the person has signed in the capacity of a witness, this is undisputed.

Let's move to the form instruction page now.

Section 4. lists the designations that must sign the form, there are 5 bulleted designations as you can see.

Given that we know the person has signed as a witness (as explained above) the only bullet point that applies here is the third, because the others do not apply to this person.

Finally the list of community property states does NOT include the state of residence in this case.

Thus it follows that a witness must also be a disinterested third party.

Furthermore, although the phraseology used in this form is not a clear as it could be, it seems to be the case that equivalent forms produced by other insurance companies all stipulate (in simpler language) that the new primary beneficiary cannot act as a witness.

You write "There is NOTHING specifically in writing that states a primary beneficiary is disqualified from signing anything" that is true, the instructions do not explicitly state this but the form does make it clear that a person signing as a witness MUST be a disinterested third party because a person signing as a witness does not fit the other bullet points listed on section 4. of the instruction page.

May I ask, are you a practising attorney?

Thanks
G

 

[Governor]

You don't have the change form that was submitted, so it may have been complete. If you're certain that an error was made, then call a lawyer and sue AIG. You will have to pay out of pocket first, but if you're certain you will win then do it. First I would contact the State insurance comission to see if the stipulations on AIG's form are law, or just their requirements.

Actually we do have a FAX of the form, a little low in resolution but enough to see very clearly everything I have said so far (plus more).

There are grounds also for suspecting that the form was filled in by the witness (which in and of itself is not improper) and possibly even fraudulently signed (as owner) by the same person (which of course becomes a federal crime once mailed).

However these are matters of educated speculation and I want to seperate known factual errors from suspected fraudulent acts.

It is causing great concern that the SSNs too are absent, because we know that the owner had long ago memorized the SSNs of his kids but we also know that his spouse never knew them (the spouse is a second wife).

We also do not know if there was just a single policy split between the kids or one policy per child and the spouse is hiding the fact.

Thanks for your advice, we are planning to approach the body that you refer to.

Thanks

G

 

[Melody70]

Ok this is bothering me. Isn't the Assignee the same as the Beneficiary?

 

[Governor]

Ok this is bothering me. Isn't the Assignee the same as the Beneficiary?

No sir, they are not the same thing. An assignee is a person or party to whom a property owner transfers (or has transferred) some or all of the property owner's rights in a particular property by means of an assignment, whereas a beneficiary is the person or legal entity the owner of an insurance policy names to receive the policy benefit if the event insured against occurs.

Furthermore, there are strict laws in place so that even if this person were an assignee (e.g had full power of attorney) they would be unable to become a primary beneficiary of a policy assigned to them. A person holding power of attorney is not legally able to make certain changes, one of these is that they are prevented from making themselves the primary beneficiary of a policy over which they are an assignee.

In our case we know that this person was not an assignee.

 

[JustAPal00]

So it's your belief that the "wife" manipulated your father into signing the form. Maybe he wasn't aware of what he was doing or maybe she signed it her self. If you're right, then you would have a case. As I stated before, you need to find out what the state insurance laws say about requirements to change beneficiaries. The companies policies may have been way more complicated than the states. If that is the case then as long as the company met the state requirements there may be nothing you can do.

 

[Governor]

So it's your belief that the "wife" manipulated your father into signing the form. Maybe he wasn't aware of what he was doing or maybe she signed it her self. If you're right, then you would have a case. As I stated before, you need to find out what the state insurance laws say about requirements to change beneficiaries. The companies policies may have been way more complicated than the states. If that is the case then as long as the company met the state requirements there may be nothing you can do.

Yes, there are two aspects:

1. It appears that she is not able to act as a witness to the change, and thus the insurance firm have made an administartive error.
2. His signature is suspect, not in a trivial manner either.

The first point needs to be established and then action taken, the second point is more complicated.

Tell me, where can a member of the public find out exactly what the state's requirements are for life insurance beneficiary changes?

I look on the SC website but really couldn't find the specific law here.

If the form has been signed incorrectly (as defined by the forms instructions) then surely this has little to do with state law? the owner (the deceased) opened the policy on the basis of its published rules and regulations.

The various instructions surely form part of a contract, and he has every right to expect that contract to be followed, for the insurance firm to accept a change despite its own instructions (even if it does comply with state law) is surely a breach of that contract?

Of course I'm no lawyer, just thinking out loud!

Thx
G

 

[JustAPal00]

You need to contact the state insurance commision. They will be responsible for overseeing all insurance policies written in the state. They can tell you the requirements. I suspect that you will be dissapointed though. I doubt that there are many hoops that you must jump through to change beneficiaries. I would think that the state would leave something like that up to the policy holder and the company.