The United States Supreme Court Decisions Concerning Life Insurance

Hillman v. Maretta, 569 U. S. ____ (2013)

In Hillman v. Maretta, the Supreme Court held that the designation of a beneficiary on a FEGLI policy trumps a conflicting state law that automatically revokes a former spouse as a beneficiary on a life insurance policy. FEGLI is Federal Employees Group Life Insurance that provides life insurance coverage to federal employees. The Hillmandecision states that federal laws which allow the insurer to pay the proceeds only to the designated beneficiary will trump any state laws that allow the insurer to pay the proceeds of a life insurance policy to a person other than the designated beneficiary.

http://www.supremecourt.gov/opinions/12pdf/11-1221_7l48.pdf

Heimeshoff v. Hartford Life & Accident Insurance Co. and Wal-Mart Stores, Inc.., 571 U. S. ____ (2013)

In Heimeshoff v. Hartford Life & Accident Insurance Co. and Wal-Mart Stores, Inc., the Supreme Court held that unless there is a statute to the contrary, a person participating in an employee welfare plan governed by ERISA (the Employee Retirement Income Security Act of 1974) and the plan can decide on the time frame for filing a lawsuit, even if the limitations period begins to run before the cause of action accrues. The Supreme Court did state, however, that the limitation period must be reasonable.

http://www.supremecourt.gov/opinions/13pdf/12-729_q8l1.pdf

Hardt v. Reliance Standard Life Insurance Co., 560 U.S. ___ (2010)

In Hardt v. Reliance Standard Life Insurance Co., the United States Supreme Court reviewed the issue of attorneys’ fee award in ERISA cases. The Court held that an ERISA claimant does not have to be a “prevailing party” to qualify for an award of attorneys fees. The Court opined that as long as the claimant achieved some degree of success on the merits, a court may award attorneys’ fees and costs under ERISA.

http://www.supremecourt.gov/opinions/09pdf/09-448.pdf

Grigsby v. Russell, 222 U.S. 149 (1911)

The Supreme Court held in Grigsby v. Russell that the policyowner has the right to transfer an insurance policy. The Supreme Court opined that since life insurance had all the basic characteristics of property, it qualified as an asset that the policyowner could transfer without any limitations. The Court drew a parallel between the ownership right in a life insurance policy and that in such investment assets as stocks as bonds. Today life insurance policyowners enjoy such rights as:

  • the right to name a life insurance beneficiary;
  • the right to change the beneficiary designation;
  • the right to assign the policy;
  • the right to borrow against the policy;
  • the right to sell the policy to another party.