<BLOCKQUOTE><font size="1" face="Arial, Helvetica, Verdana">quote:</font><HR>Originally posted by brownie:
Since my father passed away 4 years ago, my sisters and I learned that he had another Life Insurance(whole life-family plan)Policy that was opened 35 years ago when he was still married to my mother. He remarried later and changed the beneficiary( before my youngest sister turned 18 years)over to his new wife(who passed away about 1 year ago) and now the insurance claims that my step-moms children are the beneficiaries of this policy. My step-mom also signed-over all her rights to any personal property of my dad's when he passed away. How can this be possible when the policy was started to benefit my two sisters and I? Is it worth disputing? If so, how should we go about doing so?
This is an Illinois case and we are also having trouble with getting them to send us a copy of the above named policy, any suggestions? We are trying to find-out if it contained an irrevocable beneficiary.
Thanks! in advance for any help that anyone can submit.
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My response:
The insurance company is, in effect, saying to you: "We have no duty to you because you were not named as a beneficiary. Therefore, we will not send you any copies of your father's beneficiary statement. If you don't believe us, sue us, and serve a subpoena to our attorney."
I don't think there's any doubt, and I'm sure you would agree, that the owner of an insurance policy (as the owner of any property) has the right to change his/her beneficiary at any time, and without reason. Since your father was the "owner" of the policy, he had a right to designate, at any time, who would take of, and be entitled to, the proceeds of his policy.
It makes no difference that you feel that the policy was taken out to benefit your father's natural children. That would have been true if your Mom and Dad died together, at the same time. Since your natural mother was no longer in the picture (and even if she was), your father felt a need to, and had a right to, change his beneficiary statement to his new wife, your step-mother.
Since your father died before your step-mother, at the moment of death, your father's property, including the policy, (in the absence of a Will to the contrary) immediately became the owner of his property. Despite the fact she later may have signed away rights to his personal property, that was merely to the policy itself, not the beneficiary status. Then, upon her death, as long as she remained the beneficiary, the insurance company had a legal obligation and duty to pay only to her estate all of the proceeds of the policy. Once she died, the beneficiaries of her estate, her surviving children, became entitled to the proceeds of the policy.
I rather doubt there was an "irrevokable beneficiary" clause in a Term Life Insurance Policy.
The insurance company is a disinterested third party in this matter, caring not to whom it paid out it's money under the policy - - only that it carried out its legal obligation to the person (or the estate of that person) who was named as beneficiary. That was, and is, the end of their involvement.
If you feel there is some entitlement under some legal theory, your claim is as against the Estate of your Step-mom. Her children, undoubtedly, have been supplied with a copy of the beneficiary statement.
Personally, I believe this is a lost cause for you and your sisters because there is no "insurable interest" problem where the insured has procured the life or health insurance policy, i.e., the proceeds may be made payable to a complete stranger rather than to the insured's spouse, family members or heirs. The beneficiary's status has no effect on the policy's enforceability.
In summary, in California, as is the case in most all States, "An individual has an unlimited insurable interest in his or her own life, health and bodily safety and may lawfully take out a policy of insurance on his or her own life, health or bodily safety *** and make the policy payable to whomsoever he or she pleases, *** regardless of whether the beneficiary designated has an insurable interest." [Ca Ins § 10110.1(b); see also Ca Ins § 10110(a)].
IAAL
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