Sometimes, a life insurance policyholder tries to switch beneficiaries — only to discover he or she has designated an irrevocable beneficiary. While changing your beneficiary might seem like a relatively simple matter, life insurance policies frequently require complicated processes. If you (or your insurance agent) miss one step or make one error, your loved ones might lose valuable benefits. Learn more about life insurance beneficiaries below.
Changing Life Insurance Beneficiaries
When you purchase a life insurance policy, you must designate a beneficiary or beneficiaries. However, over time, you might want to change these beneficiaries. This typically occurs after a major life event, such as a marriage, the birth of a child, a divorce, or the death of a loved one. However, changing a life insurance beneficiary is more complicated than simply completing a form.
Before you change beneficiaries, you should carefully review your policy documents. Life insurance policies frequently set out specific conditions and requirements that you must meet before changing beneficiaries. If a policyholder does not meet these requirements, the insurance company will deny your beneficiary change.
Life insurance policies and their related documents can be highly technical and difficult to interpret. If you need help understanding your policy’s terms and conditions, contact a lawyer at Uscher, Quiat, Uscher & Russo, P.C. today.
What Is an Irrevocable Beneficiary?
Sometimes, you might designate someone as an irrevocable life insurance beneficiary — especially as part of an estate plan or pursuant to a divorce decree or nuptial agreement. Unlike most beneficiaries, you cannot remove an irrevocable beneficiary from a life insurance policy without his or her consent. While this permanency offers some benefits, an irrevocable beneficiary can significantly complicated life insurance matters.
Courts have differing opinions about the rights of an irrevocable beneficiary. Some courts believe that they are limited to making decisions about their stake in a policy (such as whether to change or add a beneficiary). However, other courts believe that irrevocable beneficiaries are essentially co-owners of a policy and must be involved in all policy decisions (including the decision to let a policy lapse). Due to this uncertainty, you should never designate someone as an irrevocable beneficiary unless you consult with a life insurance attorney or as required by a court order.
Discuss Your Claim With an Irrevocable Beneficiary Lawyer
If you have questions about your rights under a life insurance policy, contact an irrevocable beneficiary lawyer for assistance. Uscher, Quiat, Uscher & Russo, P.C. assists clients in New Jersey and New York with life and other insurance matters. Contact us for a free consultation today.