In June 2013, the U.S. Supreme Court ruled in its decision in Hillman v. Maretta that state laws that automatically revoke a former spouse as a beneficiary on a life insurance policy are trumped by federal laws governing FEGLI claims[1].
In Hillman, the Supreme Court stated that FEGLI claims controlled by federal laws must be paid out to the beneficiary named on a FEGLI designation form regardless of any conflicting state laws.
The state law at issue in Hillman is a Virginia statute that says that a former spouse cannot receive life insurance proceeds of a deceased ex spouse. The statute will automatically invalidate a former spouse as a beneficiary on a life insurance policy controlled by state law, but will have no effect on claims governed by federal laws. If a case implicates federal laws, any conflicting state statute will be preempted by federal laws.
Thus, if your life insurance claim is a FEGLI claim, the beneficiary designated by the insured on the policy will collect the proceeds, even if such beneficiary is a former spouse.
Not all states have statutes which automatically revoke former spouses as beneficiaries on life insurance policies. States that have not enacted such statutes will allow former spouses who remained beneficiaries on their former spouses’ policies to collect life insurance proceeds.
The decision in Hillman v. Maretta will not affect the majority of life insurance beneficiaries, because the case discussed only FEGLI and other federal law claims while many life insurance claims are state law claims.
ERISA cases are similar to FEGLI cases in that ERISA will trump any conflicting state law as well. ERISA does have many exceptions for state law claims, so you need to consult a life insurance attorney before you accept a denial from a life insurance company.
As you see, laws involved in group employee life insurance claims are complex and require legal advice. We have resolved many disputes between insurance companies and competing claimants where claim examiners working on life insurance cases were not sure about who the rightful beneficiary is.
If your claim examiner says that you are not entitled to life insurance proceeds for whatever reason, consult with our life insurance lawyer before you decide to give up. First, claim examiners working for life insurance companies are not attorneys and they may not understand all the intricacies involved in interplay between federal and state laws.
Second, insurance companies make profit when they deny claims. They routinely deny life insurance claims wrongfully, so have an experienced life insurance lawyer on your side when fighting your denied claim.
If you are a former spouse of a federal employee and you remained the beneficiary on his/her life insurance policy, you can claim the proceeds regardless of any conflicting state laws.
FEGLI claims often involve multiple conflicting claims filed for the same amount of life insurance. To avoid confusion and to receive the benefits to which you are entitled under the law, have a consultation with our life insurance attorney. We will help you understand your rights.
Call (888) 510-2212 for a free consultation.
