Life Insurance Difficulties

[Asheral]

My ex-husband and I were officially divorced in October of 2000, then, on December 7, 2000, he died in a car accident. He had neglected to change the beneficiary of his life insurance policy (obtained through his employer) from me to our children (three boys). Unfortunately, his employer (with whom he attended school for many years) is telling different stories as to why she has neglected to inform the life insurance company of his death. Every month she delays sending me the forms I need to sign so that we can collect the insurance is another month of interest my kids lose from their college fund (which will be opened when we finally collect the money). She's told different stories to different people as to why she's put this off, and we're all getting tired of listening to her lie. My kids need college money, and she's preventing them from getting it.

<u>Here's my question</u>: <b>Do I have grounds to sue her and the company?</b> Her father and his twin brother own the company, and they have several relatives, in addition to her, working for very attractive salaries in the main office. It seems to be a "family thing", and I have no problem with that, I just wish they'd be fair and prompt. They treated my ex-husband very poorly, and he just went along with them. I'm starting to wonder if they just took his money every month and never even got the policy for him.

Thanks for your time and help.

Asheral

 

[ALawyer]

First, some good news. Most states require insurance companies to pay "delayed settlement interest", often from date of death, so the kids will likely get interest when they do collect. And sometimes the rates are higher than what they would have earned at a bank.

Second, instead of suing, you should sit down with the kids and all of you write a letter to the employer and have a copy shown and sent to the life insurance company politely demanding that payment be made to the kids. My assumption is that's what you want and are not seeking any of the procceds for yourself.

 

[Asheral]

Thanks

Thanks for the advice! The boys and I will write a letter to the person in charge of my ex's insurance and send a copy to the insurance company this weekend. I'm so glad that the kids won't be losing any interest. The amount of interest may seem small, but my oldest has six more years before he goes off to college, (that's six more years of interest on the seven months I thought they'd lost), and every little bit helps. Living from paycheck to paycheck makes saving difficult, so I've only saved about $1500 for each child. Adding the life insurance to that will help tremendously!

I don't want to sue anyone - we've suffered enough recently, we certainly don't need the added stress. I just want to make sure the boys get what their Dad wanted them to have so they'll have a decent future.

Thanks again,
Asheral

 

[ALawyer]

If the beneficiaries are minors the insurance company will NOT issue the proceeds to them now, at least without a court order and/or approved guardian.

Depending on the state, the exact policy language and the company involved, the insurance company typically holds the proceeds for each of the minors, at interest, until the child is 18.

When the stock market was rising 30% per year that may have seemed cruel, but now that it is falling it suggests holding the money in safe instruments may not be such a bad idea.

If you want power to invest the money for the kids you'd likely need a court order and very often judges just require the funds be deposited with a local bank, often one that contributes to the judge's political party, and the interest rate it pays may be significantly lower than what the insurance company will pay.