Interpleader Actions and Life Insurance Claims

Our life insurance interpleader lawyers work with policy beneficiaries who were named as parties to an interpleader action and claimants who wish to contest life insurance beneficiary designations. 

Often, beneficiary disputes over who is entitled to life insurance proceeds give rise to the need for life insurers to file interpleader actions and deposit the full policy benefits into the court. If the insurer informed you that there is a potential competing claimant, most likely it will file an interpleader action. 

If you were served with an interpleader complaint, you need to act fast and seek legal counsel. Call (888) 510-2212 for a free consultation with one of our interpleader attorneys.

Our Experience in Handling Interpleader Cases

At Kadetskaya Law Firm, we handle interpleader cases involving the following circumstances:

  • The insured has been murdered and the primary beneficiary has not been ruled out as a person of interest;
  • The insured’s surviving spouse and ex-spouse both claim entitlement to the proceeds;
  • The insured had children from different marriages that ended in divorce and was obligated to maintain the same life insurance policy as child support in both divorce decrees;
  • The insured was divorced but never changed the beneficiary designation and lived in a state where “automatic revocation upon divorce” laws control an ex-spouse’s rights to life insurance proceeds;
  • The insured changed the beneficiary several days before death giving rise to suspicion of undue influence, duress, and fraud;
  • The insured had no beneficiary designation on file;
  • The insured indicated on the application that he is allocating 100% of policy proceeds to one beneficiary and 100% of the same proceeds to a different beneficiary;
  • The insured and the beneficiary died simultaneously, giving rise to disputes among the two estates and contingent beneficiaries;
  • The insured was murdered by the beneficiary who then committed suicide, giving rise to the battle of the two estates and contingent beneficiaries;
  • The insured did not comply with the insurance company’s rules about changing the beneficiary;
  • The insured expressed intent to change the beneficiary, completed proper forms, but died before submitting them to the insurer;
  • The mentally incapacitated insured changed his policy beneficiary;
  • The beneficiary change appears suspicious;
  • The insured changed its beneficiary at the last minute. 

Read how our lawyers have recovered $1.1 million for our client in an interpleader action based on beneficiary dispute.

If you think there may be a competing claim to your life insurance proceeds or if you suspect the change in beneficiary designation was obtained through fraud or undue influence, call us for a free consultation.

How Our Interpleader Lawyers Can Help

In general, if there is any uncertainty regarding the distribution of life insurance benefits, the insurer will prefer to have the court resolve the beneficiary dispute. After the insurance company files an interpleader action, it will ask the court to deduct its legal fees from the life insurance proceeds. If you hire an experienced life insurance attorney before an interpleader is filed you can save time and money. 

Our lawyers will research the legal issues of the case and present your case before the insurance company’s lawyers and the competing claimant. This will make your position stronger and may force the opposing side to settle the case without going to court. If the dispute goes through sometimes mandatory arbitration, we have the experience you need to protect your life insurance beneficiary rights.

At our law firm, we are skilled in:

  • Negotiating settlements between competing claimants; 
  • Resolving interpleader actions that have already been filed;
  • Ensuring the disputed life insurance benefit is not paid to the wrong party; 
  • Protecting our clients’ rights before and after an interpleader is filed. 

Interpleader Attorney Fee

Our interpleader lawyers work on a contingent fee basis. It means that we do not charge legal fees unless we collect the life insurance proceeds for you. Only then will we charge a reasonable legal fee. 

We take pride in offering competitive contingent fee structures and will work with you to ensure you are comfortable with the fee.  If your claim has been denied or delayed, call our life insurance lawyers at (888) 510-2212 for a free, no-obligation case evaluation. We have the experience you can trust.

Below we will address some of the most frequent legal questions we get from beneficiaries who are in need of help with their interpleader action:

Interpleader Action FAQ

Definition: What Is an Interpleader Action and How Does It Work?

An interpleader is a civil lawsuit that a life insurance company (the neutral stakeholder) initiates if it faces competing life insurance claims from different individuals who each claim to be the rightful beneficiary of a life insurance policy.

The life insurance company in these cases is a neutral party. It does not always decide who the payout should go to and prefers to allow the competing claimants to settle the dispute amicably. If the parties come to an agreement, the insurance company will make a payment according to the terms of this agreement. 

If, however, after a reasonable time passes and the parties are unable to split the proceeds amicably, the insurance company will file a lawsuit called an interpleader. This is done mainly to avoid the insurance company being sued by one of the parties who disagrees with the distribution.

Since the insurance company’s main objective is to not get sued for wrongful distribution of the proceeds, it deposits the life insurance proceeds with the court’s escrow account and withdraws from the lawsuit. The disputing parties are then left to resolve their conflict in court.  The death benefit will be paid out once a settlement is reached or the litigation is finalized. 

Common Interpleader Examples

There are many cases in which life insurance companies file an interpleader. Below are the most common situations our life insurance attorneys have handled over the years:


When a couple divorces, life insurance policies often become part of the property settlement agreement. For example, an ex-husband agrees during divorce to maintain his life insurance policy for the benefit of his minor children and ex-wife. When the divorce is finalized, he changes the beneficiary to his parents. After his death, his parents, his ex-spouse and children have competing claims for the same policy. The life insurance company will file an interpleader to allow the court to decide who should be receiving the payout. 

Another common scenario where an interpleader is likely to be filed is when state laws automatically revoke an ex-spouse as a life insurance beneficiary. If an ex-spouse is revoked, the life insurance benefit is usually distributed to the insured’s estate or the next of kin. An ex-spouse who decides to dispute automatic revocation may file a beneficiary contest which will result in an interpleader action being initiated. 

Invalid or Suspicious Beneficiary Change

Last-minute beneficiary changes often raise red flags, especially if the insured is mentally incapacitated, or incompetent to read and sign documents at the time the change is made. Such changes look suspicious and insurance companies are reluctant to make a payment to the new beneficiary if there are contesting parties alleging wrongdoing. An insurance company is more likely to file an interpleader than to be forced to decide who should receive the payout. 

If you’re in a similar situation, we can help. Our lawyers have dealt with many cases involving suspicious beneficiary changes. Read about this case where we reached a settlement agreement in an interpleader filed for this very reason.

Our lawyers explained more about invalid beneficiary changes in our blog post about contesting beneficiary designation.

No Named Beneficiary

If there is no beneficiary listed on the life insurance policy at the time of the insured’s death and two or more people claim the same benefit, an interpleader will be filed unless the parties agree to settle their dispute amicably prior to litigation.

For example, the administrator of the deceased insured’s estate may want the policy to be paid to the estate, while the insured’s children or ex-spouse may claim that they are the rightful recipients. Since these cases are complex, the insurance company will prefer to file a lawsuit rather than make a decision on the validity of the parties’ claims. 

Our lawyers talk about such cases in our blog post about what happens when the beneficiary of a life insurance policy dies.

Murder-Suicide Cases

Murder-suicide life insurance disputes occur when a beneficiary on a life insurance policy kills the insured and then commits suicide. These tragic cases are rare, but when they do occur, they present a real problem in terms of who receives the life insurance payout.

Under the Slayer Rule, if a beneficiary of a life insurance policy is under investigation for the murder of the insured or has been charged with the murder of the insured, the life insurance company often will not pay the death benefits until issues related to the beneficiary’s alleged involvement in the murder are resolved. If the beneficiary is the killer of the insured, the life insurance company will not pay to the estate of the beneficiary and the estate of the deceased insured passes as if the killer had predeceased the insured. 

You can read more about such cases in our article about denied life insurance claims due to murder.


ERISA is a federal law that controls many group life insurance policies. ERISA trumps conflicting state laws. When someone is named a beneficiary on an ERISA life insurance policy, that person has the right to receive the proceeds even if state laws automatically revoke the beneficiary or otherwise prevent them from collecting the benefit. Since there are many exceptions to this general rule, ERISA policies often become subject to interpleaders when there are several competing claimants. 

We have years of experience in handling ERISA claims, ERISA appeals as well as ERISA lawsuits.

What to Do if You Receive an Interpleader Complaint

If you have been served with an interpleader complaint, you need to act fast. Once the action is initiated, you are subject to court filing deadlines. You have a certain number of days to answer the complaint. Failure to do so could lead to a default and you losing your claim without even making an appearance. You need to hire a life insurance attorney as soon as possible or even before an interpleader is filed. Interpleader attorneys at our firm have the experience you need to file a proper response in a timely manner and protect your life insurance beneficiary rights.

If you think there may be a competing claim to your life insurance proceeds or if you suspect the change in beneficiary designation was obtained through fraud or undue influence, call us at (888) 510-2212 for a free consultation.

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