Denied FEGLI Claims Due to Invalid Beneficiary Designation

Beneficiary changes under a FEGLI policy may be deemed invalid if not performed according to the laws controlling Federal Employees’ Group Life Insurance policies. In many cases, the validity of a change of a FEGLI beneficiary nomination is disputed after the insured’s death and after two or more competing claims have been filed under the same FEGLI policy.

Beneficiary Change and State Court Orders

If a federal employee had been divorced or had children who required child support, a state court order may be involved. A state court order may direct an individual to maintain a life insurance policy on his/her life for the benefit of the ex spouse or their children. A state court order may also restrain the divorcing individual from changing beneficiaries on his/her life insurance policy.

Usually, if an individual restrained by a state court order from making any changes on a life insurance policy decides to rename beneficiaries in the future, he/she may be found in violation of a court order and such a beneficiary change may be deemed invalid.

This is not the case, however, with FEGLI policies. Federal laws control whether the insured’s change of a beneficiary under a FEGLI policy takes precedence over a state court order prohibiting a change of a designated beneficiary.

Federal laws controlling FEGLI claims state that the insured’s choice of the beneficiary cannot be disrupted even if there is a court order directing to the contrary.

In other words, a change of beneficiaries may be valid even if the insured violated a state court order by doing so. A FEGLI claim denied due to an invalid beneficiary change may be disputed with the help of an experienced attorney.

Beneficiary Change Performed by Other Than the Insured

 Federal Employees’ Group Life Insurance Act does not permit change-of-beneficiary forms to be executed by a third party acting under a power of attorney, and to the extent a state law permits such actions, it is preempted by FEGLIA.

If your FEGLI claim has been denied due to an invalid beneficiary change performed by the insured’s power of attorney, you will need a FEGLI lawyer’s advice as to what actions to take to dispute the current beneficiary designation under a FEGLI policy.

Community Property State Laws and FEGLI Beneficiary Change

FEGLI beneficiaries and family members of FEGLI insured residing in community property states may have questions about what happens to the proceeds of a FEGLI policy after the insured dies. State community property laws often require a division of marital assets upon divorce and may contradict the federal laws controlling FEGLI claims.

Any state law, including community property law, which provides for distribution of life insurance proceeds under a FEGLI policy to anyone other than a designated beneficiary is in an actual conflict with 5 USCS § 8705(a) which establishes precedence for claimants, and the statute preempts a conflicting state law.

If you are a beneficiary of a FEGLI claim or a family member of a FEGLI insured, you may be entitled to the proceeds of a FEGLI policy. Call our attorneys for a free consultation about your claim.

Call (888) 510-2212 for a free consultation.

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About the author

Attorney Tatiana Kadetskaya has over 10 years of experience in life insurance law representing beneficiaries and policy owners. She is best known for successfully collecting denied and delayed claims and settling complex beneficiary disputes and interpleader lawsuits.

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