Interpleader Lawyer

Interpleader Lawyer Alabama

Our Alabama interpleader lawyers handle: life insurance interpleader cases; beneficiary disputes; delayed life insurance claims; and denied life insurance claims.

Life insurance claims can be denied for various reasons, and it’s crucial for policyholders and beneficiaries to be aware of these potential factors to navigate the claims process effectively. While specific conditions can vary depending on the insurance company and policy, here are common reasons why life insurance claims may be denied:

  • Policy Lapse: When policyholders fail to pay their premiums, their policy may lapse or be canceled due to non-payment. In such cases, the insurance company will typically deny any claims made during the lapse period.
  • Misrepresentation or Non-Disclosure: When applying for a life insurance policy, applicants are required to provide accurate and complete information about their health, lifestyle, and other relevant details. If the policyholder provides false or incomplete information that could have influenced the insurer’s decision to issue the policy, the claim may be denied.
  • Suicide Clause: Many life insurance policies contain a suicide clause, usually within the first two years of the policy. This clause may state that if the policyholder dies by suicide during this period, the death benefit may not be paid out. After this waiting period, suicide is typically covered.
  • Contestability Period: Most life insurance policies have a contestability period, often the first two years of the policy. During this time, the insurer can investigate and deny a claim if they discover evidence of material misrepresentation or fraud on the application.
  • Exclusions: Some policies specify exclusions for particular causes of death. If the policyholder dies due to one of these excluded causes, the claim may be denied. Common exclusions may include death resulting from drug or alcohol abuse, participation in hazardous activities, or engagement in criminal activities.
  • Non-Accidental Death: Certain policies may only cover accidental death. If the policyholder dies of natural causes or an illness, the claim may be denied. However, this is less common in traditional life insurance policies.
  • Incontestability Period Expiration: After the contestability period (typically two years), insurance companies can generally only deny claims for reasons explicitly outlined in the policy. Beyond this period, if the policyholder provided accurate information during the application process, the claim should be paid out unless the policy lapses or has specific exclusions.
  • Beneficiary Issues: Claims can be delayed or denied if there are disputes or complications concerning the beneficiary designation, such as multiple conflicting beneficiaries or issues like a beneficiary’s incapacity or death.
  • Criminal Activity: If the policyholder dies while engaged in criminal activity or as a result of their involvement in illegal actions, the insurance company may deny the claim.


Alabama Life Insurance Interpleader Cases

Here’s how a life insurance interpleader typically works:

Multiple Beneficiary Claims: After the death of the insured, the insurance company receives claims from multiple individuals or entities, each asserting a right to the policy’s death benefit. These claimants could include the primary beneficiary, contingent beneficiaries, or other parties who believe they have a valid claim to the proceeds.

Interpleader Petition: Instead of making a decision on the beneficiary claims, the insurance company may file a lawsuit in court known as an “interpleader petition.” In this petition, the insurance company asks the court to determine who the rightful beneficiary or beneficiaries should be.

Deposit of Funds: As part of the interpleader process, the insurance company usually deposits the full amount of the death benefit with the court. This action effectively removes the insurance company from the dispute, as they have fulfilled their obligation to pay the death benefit.

Court Decision: The court will then review the evidence presented by the claimants, including the terms of the insurance policy and any relevant legal documents, such as divorce decrees or beneficiary designation forms. The court will make a legally binding decision on who is entitled to receive the death benefit.

Distribution: Once the court makes a decision, it will order the distribution of the death benefit to the rightful beneficiary or beneficiaries as determined by the court’s judgment.

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How an Alabama Interpleader Action Works


An Alabama Interpleader Case Background:

Mr. Anderson, a successful business owner, held a substantial life insurance policy with Life Insurance Company for example, AARP Life, Penn Mutual Life or Guardian Life. Unfortunately, he passed away unexpectedly. The life insurance policy listed two potential beneficiaries: his sister, Lisa, and his business partner, Alex.

Beneficiary Dispute:

Both Lisa and Alex claimed to be the rightful beneficiary of the life insurance proceeds. Lisa argued that Mr. Anderson had verbally expressed his intention to make her the sole beneficiary, while Alex insisted that they had a written agreement that entitled him to the proceeds as a key person in the business.

Interpleader Claim Initiation:

In light of the conflicting claims, Life Insurance Company decided to file a life insurance interpleader claim in the appropriate court. They deposited the policy proceeds with the court and submitted the necessary documentation, naming Lisa and Alex as defendants in the interpleader action.

Court Proceedings:

The court would then summon Lisa and Alex to present their cases. Lisa would have the opportunity to provide any evidence supporting her claim, such as witness statements or any documentation suggesting Mr. Anderson’s verbal intent. On the other hand, Alex would present the written agreement and argue that it supersedes any verbal communication.


The court, in its role as a neutral party, would evaluate the evidence presented by both parties. The goal is to determine the rightful beneficiary of the life insurance proceeds. If the court cannot definitively decide, the funds deposited by Life Insurance Company would be distributed equitably or as determined by the court.


Life insurance interpleader claims are essential in cases of beneficiary disputes, ensuring a fair and impartial resolution while protecting the insurance company from potential legal repercussions. This hypothetical scenario illustrates the complexity and importance of such interpleader claims in navigating beneficiary conflicts.

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