A beneficiary dispute occurs when multiple parties claim entitlement to life insurance benefits, often due to unclear, outdated, or contested beneficiary designations.

Disputes arise from unclear designations, outdated forms (e.g., listing an ex-spouse), lack of a named beneficiary, or allegations of undue influence or fraud.

Disputes may be resolved through negotiation, mediation, or litigation. Insurers may file an interpleader action, letting a court decide the rightful beneficiary.

Benefits are paid according to the policy’s order of precedence (e.g., spouse, children, parents) or state law if no beneficiary is designated.

If still listed as a beneficiary, an ex-spouse may receive benefits, especially under ERISA or federal programs like FEGLI/SGLI, unless a court order or divorce decree properly changes the former spouse designation.

An interpleader action is when the insurer deposits the benefits with a court, which then determines the rightful beneficiary to avoid paying the wrong party.

Resolution time varies—weeks for settlements, months, or years for litigation, depending on case complexity and court schedules.

Yes, if you believe the change was made under undue influence, fraud, or lack of mental capacity, you can challenge it with legal assistance.

Legal representation is advisable, especially in complex cases or interpleader actions, to present evidence and navigate legal procedures effectively.

Keep beneficiary designations updated, ensure clarity in forms, and communicate intentions clearly. Review designations after major life events like marriage or divorce.