Life insurance beneficiary interpleader
When a life insurance company receives competing claims for the proceeds, it most often does not decide the “winner.” Such decision risks the aggrieved claimant suing the life insurance company for paying the wrong person. Instead, the life insurance company can file a lawsuit and ask the court to decide who should receive the disputed life insurance proceeds.
When filing the interpleader lawsuit, the life insurance company will name all of the competing claimants as beneficiaries. Then the life insurance company will seek permission from the court to deposit the disputed proceeds with the court. And will seek a judgment from the court that the life insurance company is discharged from any further liability. The court typically grants that relief.
After the life insurance company is discharged, the competing claimants litigate to determine who receives the proceeds. The court will ultimately enter a judgments, although many interpleader disputes are resolved by settlement before the court has to decide.
If you are involved in such a contest, it is very important that you consult with an experienced interpleader lawyer as soon as possible in the process. There are many lawyers who handle all kinds of lawsuits, but few who routinely evaluate and handle life insurance beneficiary disputes. An inexperienced lawyer may not correctly determine if federal or state law applies to the dispute. That is critical, as the available remedies and the approaches can be much different if federal law applies.
