Life insurance is one of those things that most people are happy they have and hope they never have to use it. However, with changing life scenarios, people also change, and many close family, friends, and relatives create havoc in finding the rightful beneficiary of any life insurance policy. Therefore, every policy includes special mentions about every beneficiary and their share in percentages.
In such cases, it becomes crucial to take help from expert lawyers to resolve these disputes decently and delicately. Here’s everything you need to know about Life Insurance Beneficiary Disputes and what they mean for your ultimate protection.
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Reasons behind Life Insurance Policy Disputes
Suicide is the most common cause of life insurance policy disputes as it has stayed a taboo topic in many families. Beneficiary disputes can be categorized into greater categories, but not all are easy to resolve. For example, policies do not cover death by suicide, and the beneficiary cannot avail of the insurance payout. However, there are other events also that create such life insurance beneficiary disputes, including:
- Divorce
- Accidental Deaths
- Marriage
- Childbirth
- Adoption of a child
These events can create serious disputes when deciding on the beneficiary for particular life insurance. These cases often tend to become complicated, and taking help from expert lawyers becomes crucial in such cases.
What Happens During Dispute?
Life insurance policies include details about the beneficiary and their share in percentages. Once any of these beneficiaries pass away or if they are no longer able to avail of insurance benefits, the whole family is called upon to decide the next in line for benefits. The next person who is highly eligible for receiving an insurance payout is decided based on his / her relationship with the original policyholder.
If the original policyholder had children, then it becomes the responsibility of his / her immediate family to decide who will receive life insurance benefits. If a child cannot be found, parents will have to decide what to do with policy payouts.
Role of Lawyers in a Beneficiary Dispute
Life insurance beneficiary dispute cases are tricky as they often become very complicated with the number of people involved. Moreover, when it comes to legal matters, people tend to lose their cool and might even start pointing fingers at others. However, lawyers are experienced in such cases and can help you get the best deal for your life insurance benefits. Usually, lawyers try many possible ways to resolve disputes, including:
- Negotiation: In this way, life insurance lawyers find common ground between parties and reach an agreement.
- Mediation: This is another form of negotiation usually done by life insurance lawyers to resolve disputes.
- Litigation: Litigation is the last resort used in such cases. It involves court hearings while the parties fight for their rights and honor.
As per the life insurance laws, it’s always best to consult a professional lawyer before making any decision regarding your life insurance policy. They will be able to help you decide which kind of legal process works best for your case and under what circumstances you should use any one of them.
