Life insurance is an important asset in protecting your family’s financial future in case of death.
Many people obtain life insurance coverage through work because such policies are often inexpensive or free and do not require a medical exam. Employer-sponsored life insurance is also convenient, because the insured individual does not have to worry about remembering to make premium payments as they are automatically deducted from the employee’s paycheck.
The amount of life insurance obtained through work depends on the insured person’s salary. Every policy is different and in order to understand your rights as a beneficiary, you need to request a copy of the policy from the employer or the insurance company.
A Minnesota woman was charged with defrauding Mutual of Omaha Insurance Company of more than $2 million in life insurance by making a fake claim about her husband’s death.
According to the criminal complaint, the insured bought a life insurance policy on his life from Mutual of Omaha and listed his wife and son as the beneficiaries. 18 months after the policy became effective, the insured was reported dead in Moldova.
The same-sex partner of a deceased employee of Edinboro University in Pennsylvania filed a lawsuit against Cigna for wrongfully denying his life insurance claim.
He claims that Cigna denied his claim because it did not recognize him as the lawful husband and beneficiary of the decedent. According to the lawsuit, the couple resided in the same household as domestic partners from 1994 until the insured’s death in June 2012.
When the insured started working for Edinboro University in Pennsylvania, he applied for recognition of his same-sex partner as a qualified domestic partner for health care and other benefits. His application was granted and he received $50,000 coverage of life insurance from Prudential with a right to buy additional life insurance.
How can termination of FEGLI coverage affect FEGLI Beneficiaries’ rights?
Employees of the Federal Government are covered by group life insurance called FEGLI.
When they apply for coverage, federal employees are required to complete a Designation of Beneficiary form, identifying an individual as the beneficiary of the life insurance proceeds payable upon their death under the FEGLI policy.
The insurance is valid as long as premiums are paid and the insured remains in the category of eligible participants. If FEGLI coverage is terminated, pursuant to federal law, the previous designation of beneficiary is automatically cancelled thirty-one days after the insurance coverage ends.
Thus, the previous beneficiary ceases to be the designated beneficiary of the FEGLI policy. If the insured whose coverage had been terminated reinstates the policy later, he is required to complete another beneficiary designation form.
SGLI beneficiary disputes generally arise out of two or more competing claims filed for the same proceeds of an SGLI policy.
This happens when there are inconsistencies regarding the Designation of Beneficiary Form/Election Form completed by an insured. When no beneficiary is designated on the Election Form, the insurance company will pay the proceeds of an SGLI policy according to the order of precedence set up in the SGLIA (The Servicemembers’ Group Life Insurance Act).
In a recent FEGLI beneficiary dispute case, the United States District Court in New York reviewed issues of the FEGLI beneficiary designation form, a decedent’s intent in changing beneficiaries and state law claims seeking damages for unjust enrichment, conversion, misrepresentation and promissory estoppel.
In Smith v. Smith, the surviving spouse of a FEGLI insured decedent filed a claim for unjust enrichment, conversion, misrepresentation and promissory estoppel against the decedent’s mother after the insurance company paid the mother the FEGLI benefits under the decedent’s FEGLI policy. The decedent was a federal employee and was provided with a FEGLI policy.
Prior to meeting his spouse, he designated his parents as beneficiaries on his FEGLI policy. His father predeceased him leaving his mother as the sole beneficiary of the FEGLI policy pursuant to the Designation of Beneficiary form signed by the insured in 1992.