Contesting a Life Insurance Beneficiary

Why It Happens and What It Means

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Life insurance policies can provide your loved ones much-needed money when you pass away. But if you don’t plan well, there may be disputes over who gets it. Making last-minute changes to your beneficiaries, or failing to update them when you should, can increase the risk of conflict.

Here’s what you should know about contesting a life insurance beneficiary, including what it means, why it happens, and how to avoid it.

Key Takeaways

  • The beneficiaries designated in your life insurance policy can be disputed in court after you pass away.
  • These conflicts usually happen when you fail to properly update your beneficiaries after major life events like marriage, divorce, and having or adopting children.
  • Insurance companies can’t settle beneficiary disputes themselves. They’ll encourage the disputing parties to seek mediation or go to court.
  • To protect yourself from these types of conflicts, update your beneficiary forms promptly when life changes happen. Consider having a witness and clearly documenting your wishes.

What Is a Life Insurance Beneficiary?

A life insurance beneficiary is a party explicitly named as the intended recipient of the policy’s death benefit (the amount payable to the beneficiary(ies) when a policyholder passes away). You’ll choose your beneficiaries when you first purchase a policy; people often designate their spouse or adult children.

When you pass away, your policy pays the death benefit according to your instructions. You can name both primary and contingent beneficiaries. As the name suggests, primary beneficiaries are paid first, while contingent beneficiaries only collect money if all primary beneficiaries are deceased, unable to be located, or deemed ineligible at the time of your passing.

For example, say you designate your husband and daughter as your primary beneficiaries, and each is supposed to get 50% of the death benefit. You also name your grandson as the sole contingent beneficiary. If your husband were to pass away before you, your daughter would get 100% of the death benefit when you passed. Your grandson would only collect if your daughter were also deceased, unable to be located, or declared an ineligible beneficiary for some reason.


It’s best to avoid naming minor children as beneficiaries unless you designate a guardian or legal representative. A life insurance company will not release the death benefit directly to a minor child, and if no guardian has been identified, the death benefit may get held up until the court designates one.

When Beneficiaries Might Be Contested

Beneficiaries are frequently contested when you fail to update the beneficiary information on your life insurance policy after major life events—always consider the impact that events like marriage, divorce, and having or adopting children may have on your named beneficiaries.

Beneficiaries are more likely to be contested when you don't submit a beneficiary change request in a timely manner. Some of the most common scenarios include the following: 

  • You remarry: One of the most common scenarios in which a beneficiary gets contested is when someone divorces and remarries. If they don’t update the beneficiary from their former spouse to their current one, the current spouse may contest it.
  • Someone argues you did not have the mental capacity to change beneficiaries: This is more likely to happen if you make changes during your later years, especially if you experience dementia or any illness that could affect your mental state, and if the change wasn’t properly witnessed.
  • Someone argues you were pressured to change beneficiaries: As you age, there’s an increased chance you may be coerced into making beneficiary changes. For example, if you change your beneficiary from your son to your brother three days before you pass away with Alzheimer's, your son may contest that decision, even if it's what you truly wanted.

In cases such as these, there is legal precedent for disputes based on concerns regarding events such as falsification of documents, coerced changes to beneficiary forms, and diminished mental capacity of the policyholder.

State and Federal Laws

Disputes can be subject to state or federal law. Most commonly, the laws impact spousal rights, but they can also affect the court proceedings, including which court has jurisdiction and whether the case must be heard by a jury.


The language in a divorce decree may also determine which spousal beneficiary receives the death benefit, regardless of your marital status at the time of your passing or what your life insurance policy says. 

Policies are likely subject to federal law if you get them through a private employer, as an active or retired military service member, or while working as a federal government employee. In these cases, death benefits may be more likely to be paid according to the policy’s documents—meaning it could be much harder to contest the designation of a former spouse as a beneficiary.

What Happens When Someone Contests a Beneficiary?

When someone contests a beneficiary, they typically hire an attorney. In addition, they must notify the insurance company in writing that they’re disputing the designation. Usually, the individual contesting the beneficiary must contact the insurance company before it pays out the death benefit, which can be as little as a few weeks after the insured person’s death.

When they receive a notice of contest, insurance companies will often delay paying the proceeds to any of the involved parties because they don’t want to risk that a court might later find that they paid the wrong one. 

The insurance company will generally wait for the disputing parties to settle out of court. If this doesn’t happen, the insurance company files an “interpleader” proceeding, which initiates a lawsuit between the disputing parties that must be settled in court.


While a dispute over your policy proceeds is ongoing, the rest of your estate stays open—anything in probate will stay there, which can cause fees, taxes, and penalties to build up. Therefore, it’s often beneficial for all parties involved to settle to avoid a long, expensive court battle.

How To Protect Your Beneficiaries

The best way to protect your beneficiaries is to be proactive, which often includes:

  • Reacting to major life events promptly and updating your beneficiary designations accordingly
  • Confirming that you followed insurance company procedures when making updates; mistakes can delay or prevent attempted beneficiary changes
  • Informing your social circle of your beneficiary decisions and clearly documenting them to avoid disagreements as to your wishes


Generally, beneficiary designations override wills. Even if you designate a different beneficiary in your will, the party named in your life insurance policy is who the life insurance company will pay the death benefit.

Once you pass away, there’s little anyone else can do to change the beneficiaries named in your life insurance policy. If you haven’t designated beneficiaries properly, take steps to protect your loved ones and make sure your beneficiaries are up to date as soon as possible.

Frequently Asked Questions (FAQs)

Who can change the beneficiary on a life insurance policy?

In general, only the policyholder (the owner of a life insurance policy) can change a designated beneficiary. Once they pass away, it’s usually impossible to remove or add someone new.

How long does a beneficiary have to claim a life insurance policy?

Fortunately, there is generally no deadline for beneficiaries to claim the proceeds from a life insurance policy, although it’s recommended that they do so as soon as possible. 

What is a contingent beneficiary?

A contingent beneficiary only collects death benefits if the primary beneficiaries named in the policy are all deceased, unable to be located, or disqualified by the insurance company when the insured party dies.

What is an irrevocable beneficiary?

If a beneficiary is designated as an “irrevocable beneficiary,” the policyholder must get their consent before changing their beneficiary status. Irrevocable beneficiaries have rights that regular beneficiaries do not, including the right to deny a policyholder’s attempts to take away their share of the death benefit.

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  1. Haven Life. "How to Name a Child as a Life Insurance Beneficiary."

  2. Sanders, Motley, Young & Gallardo. "Life Insurance Beneficiary Disputes," Page 3. "The Alternative Will Contest."

  3. Sanders, Motley, Young & Gallardo. "Life Insurance Beneficiary Disputes," Page 10. "The Interpleader."

  4. Heban, Murphree & Lewandowski, LLC. "Everything You Need to Know About Disputing a Life Insurance Beneficiary."

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