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Life Insurance Interpleader

Picture of Life Insurance Policy

Disputes about who gets paid life insurance benefits can end up in court in a type of lawsuit called “Interpleader.”

If you were served with lawsuit papers by a life insurance company in a dispute over life insurance benefits, it was likely that the insurance company sued you in a type of suit called an “Interpleader.”

What is Interpleader?

Interpleader is the name for a lawsuit filed by someone who holds money which multiple people claim as theirs.  Often, when someone dies, more than one person claims to be the beneficiary.  In that situation, the life insurance company can file an Interpleader lawsuit to let all of the competing beneficiaries fight it out in court.  The life insurance company gets to deposit the the life insurance benefit in an account operated by the clerk of court, and then it is allowed to withdraw from the lawsuit.  The people competing for the life benefit then battle it out before the judge.

What types of situations come up in Life Insurance Interpleader Cases?

There are 4 common situations where people dispute who should get life insurance proceeds, and cases end up in court.  These are not the only way these issues come up, but they are the most common.

1. Beneficiary Designation Form Problems:

Often, the person who died did not properly fill out the forms necessary to declare their beneficiary.  Sometimes, there are multiple beneficiary forms, and the most recent one is not totally completed or the names are not properly stated on the forms.  In other situations, a form is completed, but not properly witnessed.

Our firm once handled a case where one person claimed the person who died had submitted a new beneficiary form shortly before their death, but we were able to prove that it was forged.  The form required a witness, and the person who allegedly witnessed the signature did not actually sign it.  That case required a handwriting expert, something that is not uncommon in life insurance cases.

2. Undue Influence by family or caregivers:

Another circumstance that gives rise to disputes over life insurance benefits is when a family member or other caregiver is close to the person who died.  In these situations, the dying person executes a new beneficiary designation shortly before their death.  The form is proper, but the caregiver or family member unduly influenced the dying person.  They used their closeness to get the dying person to name them the beneficiary.

These fights can be more intense, because they often involve family who feels they are owed the money for taking care of the dying person.  When they involve outright fraud, the person accused can fight very hard to avoid losing the money they swindled.

3. Mental Incompetence:

If the dying person is not mentally competent to execute a beneficiary designation yet they still do, that can be litigated in court.  Sometimes it is a case of undue influence, and other times the incompetent person executes a new designation without family or loved ones knowing about it until after the fact.

4. Divorce – Ex-spouse vs. New spouse:

Disputes between an ex-spouse and a new spouse can be bitter, and often result in Life Insurance Interpleader lawuits. The most common situation comes up when people get divorced, and one person does not change their beneficiary designation, leaving their ex-spouse as the designated recipient of any life insurance that pays out when they die.

Some states, like Florida, have a law that treats an ex-spouse as if they are died before the person who had named them beneficiary of a life insurance policy.  Florida’s law tries to void the rights of the ex-spouse, but that will not always apply depending on the law the governs a particular life insurance policy.

What kind of attorney do you need?

You need to hire an attorney that is familiar with life insurance disputes, as well as court procedures in the court where the lawsuit is pending.  Life Insurance Interpleader lawsuits are filed both state and federal courts.

Because these cases often involve larger sums of money and parties that are based in different states, Life Insurance Interpleader cases are commonly filed in federal courts.  Many attorneys do not practice regularly in federal court.  You want an attorney who understands the Federal Rules of Civil Procedure and frequently appears as counsel in federal lawsuits.  Federal court rules are very different than state courts.  For example, federal judges require much more written briefing than state judges, so you want an attorney that is not only prepared to write as much as required, but is good at writing legal argument. You need an attorney that has been involved in hundreds of federal lawsuit to know that you have someone with the experience to handle your life insurance case.

Of course, if the case is pending in state court, you want an attorney who understands the procedures of your state’s court system.  Be sure to search the internet to compare the experience different attorneys have handling Life Insurance Interpleader cases.

How do you know if your attorney has experience with Life Insurance Interpleader cases?

Ask.  It is as simple as that.  You can also research online.  Some of the things you want to know:

  • How many Life Insurance Interpleader cases has the attorney handled?
  • How many cases has the attorney handled in the court where the lawsuit was filed?
  • If the case is in federal court, do they have the writing skills to win cases?
  • Have they written articles or blogs about Life Insurance and Llife Insurance Interpleader lawsuits?
  • How is their communication style?  Did they write what is on their website?  Can you understand what they are saying?
  • When you talk to the attorney, do you feel you can ask them any question you want?  Will they answer it in a way that you understand?

You only get one chance to hire your attorney.  Make sure you are comfortable with the Life Insurance attorney you choose.



John V. Tucker is an experienced Life Insurance Attorney who has handled these types of cases for 25 years.  He has handled hundreds of Life Insurance claims and lawsuits in Florida state courts, and multiple federal courts.  To schedule a free consultation about your Life Insurance case, call us at (866) 282-5260, toll free from anywhere in the U.S.A.

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