Our Louisiana 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.
A Louisiana life insurance interpleader is a legal action that occurs when there is a dispute over who is entitled to receive the proceeds of a life insurance policy after the death of the insured. An interpleader is a way for the life insurance company to avoid liability and potential lawsuits from the conflicting claimants by asking the court to decide who should get the money.
The defendants in the interpleader suit may include the beneficiary named in the policy, the estate of the insured, other relatives of the insured, creditors of the insured, or anyone else who claims a right to the policy proceeds. The defendants may have different reasons for challenging the validity of the policy or the beneficiary designation, such as fraud, duress, undue influence, lack of mental capacity, divorce, or murder.
The court will then hold a hearing or a trial to determine who is entitled to receive the policy proceeds. The court will apply Louisiana state law and federal common law to resolve the dispute. The court may award the entire amount to one party, or divide it among several parties according to their respective rights and interests. The court may also award attorney fees and costs to the prevailing party or parties.
An interpleader suit can be complex and time-consuming, and the following may lead to a Louisiana interpleader lawsuit:
Contested beneficiary designation. This occurs when there is more than one person who claims to be the rightful beneficiary of the policy, such as a former spouse, a current spouse, a child, a sibling, or a creditor. The insurer may not be able to determine who is the valid beneficiary based on the policy documents, the state law, or the circumstances of the case. For example, if the insured changed the beneficiary after a divorce, but did not comply with the formal requirements of the policy or the state law, the insurer may face conflicting claims from the ex-spouse and the current spouse.
Disputed cause of death. This occurs when there is a question about whether the death of the insured was caused by an accident, a suicide, a homicide, or a natural cause. The insurer may deny the claim based on an exclusion clause in the policy that excludes coverage for certain causes of death, such as suicide within two years of purchasing the policy, or death resulting from illegal or dangerous activities. However, the beneficiary may challenge the insurer’s decision and provide evidence that the death was not excluded by the policy. For example, if the insured died from a drug overdose, the insurer may deny the claim based on a drug abuse exclusion, but the beneficiary may argue that the overdose was accidental and not intentional.
Alleged fraud or misrepresentation. This occurs when the insurer accuses the insured or the beneficiary of lying or concealing material information in the application for life insurance or in the claim for benefits. The insurer may deny the claim based on a rescission clause in the policy that allows it to cancel the contract and refund the premiums if it discovers fraud or misrepresentation within a certain period of time, usually two years. However, the beneficiary may dispute the insurer’s allegation and prove that there was no fraud or misrepresentation, or that it was not material to the risk assumed by the insurer. For example, if the insured failed to disclose a pre-existing medical condition in the application, but died from an unrelated cause, the insurer may deny the claim based on fraud or misrepresentation, but the beneficiary may contend that the omission was not relevant to the cause of death.
Transamerica Life Insurance interpleader: the court granted summary judgment to Colynn Marsch, who was the designated beneficiary of a life insurance policy issued by Transamerica. The court found that the policy was valid and enforceable, and that there was no evidence of fraud, undue influence, or lack of capacity on the part of the insured, who had changed his beneficiary from his ex-wife to Colynn Marsch shortly before his death.
CMFG Life Insurance interpleader: the court set aside a default that had been entered against Vereta Lee, who was one of the claimants to a life insurance policy issued by CMFG. The court found that Vereta Lee had not been properly served with the interpleader complaint, and that she had a meritorious defense based on her status as the insured’s spouse at the time of his death.
Amica Life Insurance interpleader: the court discharged Amica from liability and awarded it attorneys’ fees and costs for filing an interpleader action. The court found that Amica had acted in good faith and had a reasonable fear of multiple liability, as there were conflicting claims to the proceeds of a life insurance policy issued by Amica. The court also ordered the remaining defendants to litigate their claims among themselves.
Sun Life Insurance interpleader: the court awarded 85% of a $328,000 life insurance death benefit and 100% of a 401 (k) plan to the ex-wife and child of Timothy Jordi, who was murdered by his widow in 2018. The court found that the widow had forfeited her rights to the benefits under the slayer statute, and that the ex-wife and child were entitled to them as contingent beneficiaries.
A Louisiana Interpleader Case Background:
Mr. Anderson, a successful business owner, held a substantial life insurance policy with Life Insurance Company such as Mutual of Omaha Life, AIG Life or New York 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.