Home Life insurance Can you dispute a life insurance beneficiary? Can you dispute a life insurance beneficiary? There are a few times when it makes sense to dispute the beneficiary on a life insurance policy: in times of major life changes or when the policyholder is ill or not of sound mind. Disputes can be time-consuming and costly. Written by Beth Orenstein | Reviewed by Nupur Gambhir Nupur Gambhir Nupur Gambhir is a content editor and licensed life, health, and disability insurance expert. She has extensive experience bringing brands to life and has built award-nominated campaigns for travel and tech. Her insurance expertise has been featured in Bloomberg News, Forbes Advisor, CNET, Fortune, Slate, Real Simple, Lifehacker, The Financial Gym, and the end-of-life planning service. | Updated on: July 6, 2023 Why you can trust Insure.com Quality Verified At Insure.com, we are committed to providing the timely, accurate and expert information consumers need to make smart insurance decisions. All our content is written and reviewed by industry professionals and insurance experts. Our team carefully vets our rate data to ensure we only provide reliable and up-to-date insurance pricing. We follow the highest editorial standards. Our content is based solely on objective research and data gathering. We maintain strict editorial independence to ensure unbiased coverage of the insurance industry. Let’s say your husband never updated the beneficiaries on his life insurance policy to reflect your marriage. When he died unexpectedly, his ex-wife and their children were the only beneficiaries named on the policy. You and your children were not. Can you dispute this?On rare occasions, you can dispute a life insurance beneficiary. However, it’s costly and can take a long time, and you may not win. Read on for more on how to dispute a life insurance policy’s beneficiary, when you might be able to do it, and why it might not be worthwhile.Key TakeawaysBeneficiary disputes can be made because of major life changes.Marriage, births, deaths or adoptions may prompt a life insurance dispute.If a policyholder was ill or not of sound mind when making a change, a family member might dispute their choice of beneficiary.Be aware that disputing a beneficiary can be time-consuming and costly as it involves the courts, not just the insurance company.When can you dispute a life insurance beneficiary?“There are some limited situations where a life insurance beneficiary can be disputed and, if you do, you should seek legal advice,” says Marvin Feldman, former president and CEO of the Life and Health Insurance Foundation and Life Happens, two non-profit organizations that educate the public about insurance planning and decision-making. “Life changes such as marriage, divorce, remarriage, the birth of a child or an adoption are the most common reasons for life insurance disputes,” Feldman says.Another common situation leading to a life insurance beneficiary dispute is a case in which a seriously ill policyholder makes a change in his/her beneficiaries toward the end of his/her life. Partners or other family members who are left out may claim that the policyholder wasn’t of sound mind when making the latest changes. They believe the newly named beneficiary may have taken undue advantage of the policyholder and convinced them to change the policy.What are the odds of winning a life insurance dispute?Whatever the reason, when a life insurance policy is disputed, it becomes a legal issue and a matter for the courts to decide, says Feldman. “The life insurance companies can never decide for themselves whether the family member’s or challenger’s claim is legitimate and the beneficiaries should be changed. Only the courts can make that decision.” After hearing the evidence, the court may decide to uphold the originally named beneficiaries or it could agree that the beneficiaries were legitimately updated. “In the end, the insurance companies that issued the policies are going to go by whatever the court tells them,” Feldman says.In most cases, according to Feldman, it is not easy for those disputing beneficiaries to prove their case before a judge. An insurance policy is considered a signed contract that is irrefutable. It can be particularly difficult to prove fraud – that the policyholder was coerced into changing a beneficiary by someone who only came into his or her life toward the end.Life insurance beneficiary disputes can drag on and become costlyNot only can disputing a beneficiary — like disputing a will — be legally difficult, but it also can turn very costly and time-consuming, says Feldman. While the case is in dispute, the life insurance companies place the payout in a trust held by a state court. In the meantime, “the estate stays open and fees accrue and taxes accrue and penalties accrue,” he says. “It can become an exceedingly expensive situation.”For that reason, Feldman says that cases may go to mediation or arbitration. “It’s far less expensive to use that type of settlement than to take it to court, and, even if you take it to court, you may not be on the winning end.” The two parties often work out an agreement and split the proceeds rather than fight a lengthy court battle over the life insurance beneficiaries and watch the payout evaporate in legal fees. QuickTake Can a spouse override a life insurance beneficiary? Can you cash in a life insurance policy to pay off debt? When is it wise to take cash from your life insurance policy? How do beneficiaries file a life insurance claim? Faking death to collect life insurance money: How common is it? See more > Avoid disputes by keeping life insurance policies up to dateBecause challenging beneficiaries is not easy and someone can end up disappointed and bitter, it’s best to head off disputes before they start. Feldman recommends reviewing your life insurance policy on a regular basis. “You should have a life insurance agent, and [they] should stay in touch with you to make sure your policies adequately reflect your needs, especially when you have a life change,” he saysIt’s particularly important to have witnesses when you want to make what some might see as a controversial change, such as changing beneficiaries. “The policyholder can do whatever he wants,” Feldman says, but gathering witnesses could save trouble later if he tells those involved of the changes he’s making. “It would be harder for people to dispute changes in beneficiaries if the policyholder made it clear he knew what he was doing when he made them,” Feldman says.“Make sure your professional advisers are made aware of why you made those decisions so when they’re questioned, there’s someone who understands the background,” Feldman says. “That doesn’t mean the beneficiaries still can’t contest it — and if there’s money involved, they might — but it will make it more likely that your true wishes are confirmed.”The lesson here is that while you could make a dispute, it’s much more time and cost-effective to keep your policy up to date throughout the years to avoid any conflicts. × Get Free Life Insurance Quotes Today! 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