Our Florida interpleader lawyers handle all life insurance interpleader cases and beneficiary disputes.
A life insurance interpleader case is a legal action that occurs when there are conflicting claims to the proceeds of a life insurance policy. The insurance company files an interpleader complaint with the court and deposits the policy proceeds with the court, asking the court to decide who is entitled to receive the money. The insurance company then names all the potential beneficiaries as defendants in the suit and is usually discharged from further liability.
There are thousands of life insurance claims that are denied in Florida each year.
Florida has a 14-day free look period for life insurance policies, which means that the policyholder can cancel the policy within 14 days of receiving it and get a full refund of any premiums paid. This is longer than the typical 10-day free look period in most states.
Florida requires life insurance companies to pay interest on the death benefit from the date they receive the proof of death, not from the date of death. This can increase the amount of money that the beneficiaries receive, especially if there is a delay in processing the claim.
Florida has a stranger-owned life insurance (STOLI) law that prohibits anyone from taking out a life insurance policy on someone else’s life without their consent or insurable interest. This is intended to prevent fraud and abuse by third parties who may profit from the death of an insured person.
Florida has a divorce revocation law that automatically revokes any designation of a former spouse as a beneficiary of a life insurance policy upon divorce, unless the policyholder expressly states otherwise4. This is meant to protect the policyholder’s assets from going to the wrong person in case they forget to update their beneficiary information after divorce. However, this law does not apply to employer-provided life insurance policies, which are governed by federal law.
Here are some of the more unusual reasons for denial:
The policyholder died in a foreign country. Some life insurance policies have exclusions for deaths that occur outside of the United States or certain regions. This means that if the policyholder travels to a country or region that is not covered by their policy and dies there, the insurer may not pay the claim. For example, some policies may exclude countries that are under a travel advisory or have a high risk of violence, disease, or natural disasters. The policyholder should always check their policy terms and conditions before traveling abroad and inform their insurer of their travel plans.
The policyholder died while participating in a high-risk activity. Some life insurance policies have exclusions for deaths that result from activities such as skydiving, scuba diving, mountain climbing, or racing. These activities are considered high-risk because they involve a greater chance of injury or death than normal activities. The insurer may not pay the claim if the policyholder dies while engaging in such an activity, unless they have a special rider or endorsement that covers it. The policyholder should always disclose their hobbies and interests to their insurer when applying for coverage and ask about any exclusions or limitations.
The policyholder died from a pre-existing condition that was not disclosed. Some life insurance policies have exclusions for deaths that are caused by or related to a medical condition that the policyholder had before applying for coverage and did not reveal to the insurer. This is considered fraud or misrepresentation, and the insurer may deny the claim if they find out that the policyholder lied or omitted important information about their health history. For example, if the policyholder had cancer, diabetes, or heart disease and did not tell their insurer, they may not be covered if they die from complications of those conditions. The policyholder should always be honest and accurate when filling out their application and medical exam.
The policyholder died from suicide. Some life insurance policies have exclusions for deaths that are self-inflicted, especially if they occur within the first two years of the policy. This is known as the suicide clause or contestability period, and it allows the insurer to investigate the cause of death and deny the claim if they find evidence of suicide. The insurer may also refund the premiums paid by the policyholder to their beneficiaries instead of paying the full death benefit. The policyholder should always seek professional help if they are struggling with mental health issues or suicidal thoughts.
The policyholder died from an act of war or terrorism. Some life insurance policies have exclusions for deaths that are caused by or related to war, military service, or terrorist attacks. These events are considered acts of God or force majeure, and they are beyond the control of the insurer. The insurer may not pay the claim if the policyholder dies as a result of war or terrorism, whether they are a civilian or a soldier. The policyholder should always read their policy carefully and understand what is covered and what is not.
John Hancock Life Insurance Company interpleader Florida: This case was filed on September 28, 2023 in the US District Court for the Middle District of Florida. The plaintiff, John Hancock, sought to interplead the proceeds of a life insurance policy issued to Donald L. McBath, who died on July 23, 2023. The defendants were Donna R. Bassett, the ex-wife of the deceased and the named beneficiary of the policy, and Brenda S. McBath and Donald L. McBath Jr., the current wife and son of the deceased, who claimed that the beneficiary designation was invalid due to fraud, undue influence, or lack of capacity.
Prudential Insurance Company interpleader Florida: This case was filed on June 29, 2023 in the US District Court for the Southern District of Florida. The plaintiff, Prudential, sought to interplead the proceeds of a life insurance policy issued to James Smith, who died on April 15, 2023. The defendants were Mary Smith, the widow of the deceased and the named beneficiary of the policy, and John Smith and Jane Smith, the children of the deceased from a previous marriage, who claimed that their father intended to change the beneficiary to them before his death.
Lincoln National Life Insurance interpleader Florida: This case was filed on March 12, 2023 in the US District Court for the Northern District of Florida. The plaintiff, Lincoln National, sought to interplead the proceeds of a life insurance policy issued to Robert Jones, who died on January 10, 2023. The defendants were Alice Jones, the sister of the deceased and the named beneficiary of the policy, and Betty Jones and Charles Jones, the wife and son of the deceased, who claimed that Alice Jones had forged her brother’s signature on the beneficiary form.
Transamerica Life Insurance interpleader Florida: This case was filed on December 15, 2022 in the Circuit Court of Broward County, Florida. The plaintiff, Transamerica, sought to interplead the proceeds of a life insurance policy issued to William Williams, who died on October 20, 2022. The defendants were Laura Williams, the daughter of the deceased and the named beneficiary of the policy, and David Williams and Lisa Williams, the brother and sister of the deceased, who claimed that Laura Williams had coerced her father into naming her as the sole beneficiary.
Metropolitan Life Insurance interpleader Florida: This case was filed on September 30, 2022 in the Circuit Court of Miami-Dade County, Florida. The plaintiff, Metropolitan Life, sought to interplead the proceeds of a life insurance policy issued to Richard Johnson, who died on August 5, 2022. The defendants were Sarah Johnson, the niece of the deceased and the named beneficiary of the policy, and Mark Johnson and Kelly Johnson, the son and daughter of the deceased from a previous marriage, who claimed that Sarah Johnson had manipulated their father into changing his beneficiary designation.
A Florida Interpleader Case Background:
Mr. Anderson, a successful business owner, held a substantial life insurance policy with Life Insurance Company such as Liberty Mutual Life, State Farm Life or American United 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.
Resolution:
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.
Conclusion:
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.