Our mothers life insurance - Is the life insurance company liable for making a huge mistake?

Question

Up until the time of her death the life insurance company was telling us that my mothers life insurance went equally to each of her four children. After she died they called and said none of it goes to her children and all of it goes to her spouse. And it was never the way people thought it was. Just a big mistake. The question is do you think the life insurance company is liable or would be liable in court for making such a huge mistake? Could it be like buying something and still is the price they told us it was. That is just the kind of thing that could contribute to a person death if you know what I mean. I can say this because I was probably the only one that did not know a thing about a life insurance policay until after her death.

Answer 1

If your mother named the beneficiary as her husband then I am sorry. There is nothing that can be done about that.

How exactly do you know it was a mistake?

Well, you can take them to court but unless they maintained record of such then you won't be able to prove it. Your only hope is to find a copy of her policy saying such. Sorry if you are angry but there isn't much you can do unless you can get your hands on the records, sorry. Get a lawyer if you feel you have a case and be prepared for a fight from the spouse.

If it was changed after the fact then it's fraud and forgery. Like I said get a lawyer or get whoever is the executor of the estate to seize those records from the insurance company. But do get a lawyer because you need to block any disbursement of the policy to the spouse if you feel this strongly about it. Good luck.

Answer 2

If the insurance company doesn't have signed documentation from your mother (or her power of attorney, if applicable), then you can fight it.  IF the insurance company has signed documentation that the beneficiary is her spouse, then there is likely nothing that you can do, it's a simple mistake in information that was given to you, and does not impact whether or not the policy is being paid out.

The insurance company would have absolutely no benefit in changing the beneficiary from the kids to the spouse, so I can't see them just changing it after her death.

Answer 3

A few quick questions to ask / find out:

1.  Have you looked at the actual life insurance policy?  If so, in there will be the "beneficiary provision", that was set up when your mother first bought the insurance.

2. Do you have / have you seen a copy of a "beneficiary change form"?  Possibly in some of your mother's financial papers, as this (if done) is an "endorsement" that is done post-sale of an insurance policy.  A copy would have been sent to her, if ever done.

3.  If the company had told you that the beneficiaries were your mother's four children, was this in print, or verbal only?

Was it the agent, or some one from the companies servicing office or Home Office?

4. The onus is on the company to provide proof to you as to where / when the beneficiary provision was changed, if that was the case, to your mother's spouse.

5.  When in doubt and / or the company is of little (or slow) help, contact your state's Dept of Insurance - Consumer Affairs department.  Insurance is regulated and governed by the state level, not the Federal level; each state is different from each other.

Good luck