Life Insurance - Lost Beneficiary

[rmsbuffalo]

New York State -

My father in law passed away and left a life insurance policy which he always said named my wife and her sister as beneficiaries. After he died however, we were unable to find a statement of beneficiary. The insurance company says that they have no statement of beneficiary (one girl over the phone told us that they probably lost it when they moved their office.)

They are not denying the claim, but want to pay the benefit to the deceased's estate which would make it vulnerable to outstanding creditors, which was clearly not his intention when my father in law was paying the premiums.

Is it not the insurance company's responsibility to make sure that beneficiaries are designated for the policies they sell? I can understand a problem if an assigned beneficiary dies or is missing or doesn't come forward, but for them to not have any record of beneficiary to me seems blatantly irresponsible. To accept premium payments on a life insurance policy which names no beneficiary borders fraud does it not?

Though I would assume that NYS law directs the Insurance company to pay the benefit to the estate if the beneficiary cannot be found, I would assume that the intent of this law is to prevent insurance companies from profiting from uncollected benefits. Surely the intent would not be to provide direction for irresponsible administration.

Are we obligated to prove that we ARE beneficiaries, or is it the insurance company's obligation to prove that we are NOT beneficiaries?

What recourse do we have?

JM

 

[ALawyer]

I assume you are talking about individual insurance that the deceased paid for himself, and NOT group insurance provided by an employer.

Many insureds fail to name beneficiaries for their insurance policies. And if one names no beneficiary, or the named beneficiary dies and there is no "contingent beneficiary" named, the insurance company pays the estate. It does not "profit".

OFTEN the application itself asks the insured to name the beneficiary righton it, and on individual policies a copy of the application itself is regularly bound into the policy. That may name the beneficiary for you. In the old days any changes required the policy to be returned to the company and a new beneficary endorsement to be typed onto it or attached.

If the company has a record of receiving a request for a changed policy beneficiary, but can't find any new designation, then there is sloppiness. But that's not what I understand happened.

If it is group insurance often the employer who provides the insurance does its own administration and it holds the designations and the fact is they tend to be less careful than the insurance companies.

YOU have the burden of proving YOU are the named beneficiary.

 

[rmsbuffalo]

This is a follow up to my original posting. We have located the designation of beneficiary for the policy, and all problems should be resolved as a result.

All who have read this post should learn from our experience that an insurance company can and will lose valuable documents such as this and have a strong indifference to the disposition of the benefit, so long as the benefit is paid out and their potential liabilities are eliminated by "affidavits".

The lesson is to be sure that insured and beneficiary alike always know the whereabouts of these documents, or there could be a lot of lost money.

Thanks to ALawyer for your reply...

JM