Life Insurance does not want to pay.

[DevonnaLee]

My ex-husband just passed away and I am a beneficiary on the life insurance policy. The insurance co. said Pennsylvania passed a law that a former spouse shall become ineffective upon devorce unless addressed in the devorce decree. The policy was taken out and I was named beneficiary before we got married. We were not Informed of this when we took out the policy or after. I think the law was passed after the policy was taken out. I had planed to use the policy for payment on the funeral and headstone. The funeral director held the policy as collateral for payment. My questions are: can the insurance company stick me with the bill after telling the funeral director that the policy was in good standing? Also my son being the contingent on the policy but only eleven years of age is not able to recieve any money untill I would go to court and file to be legal guardian of My own son which has lived with me from the day he was born. Are they miss leading me in anyway or are they within there legal rights?

[Edited by DevonnaLee on 02-23-2001 at 06:01 PM]

 

[ALawyer]

The insurance company is simply saying that they want to pay, but that it is your son or late husband's estate (and if the policy is small companies can permit payment to the heirs at law, your son here) who is the beneficiary, not you, because there was a divorce. What the law says is that a divorce voids the beneficiary designation naming the former spouse.

Many states have that type of law to protect children and new spouses. (Many ex-spouses would be happy to see their ex- dead, and the law knows this and say let's not let them profit from it, unless there is something in the divorce decree to the contrary.) That keeps the kids and new spouses from accidentally being cut out.

The insurance company likely would hold the money, and credit interest, until the child is 18, and then pay him the proceeds plus interest.