Can a life insurance company change the beneficiary?

Yes, a life insurance company can change the beneficiary of a policy under certain circumstances. The policyholder typically designates a beneficiary when they purchase the policy, and this person or entity receives the death benefit if the policyholder passes away. However, there are several scenarios in which a life insurance company may change the beneficiary:

• The policyholder requests a change: If the policyholder wishes to change the beneficiary, they can do so by submitting a request to the insurance company in writing. The policyholder may need to fill out a form or provide other documentation, such as a death certificate or proof of relationship.
• Divorce or separation: If the policyholder gets divorced or separated, the ex-spouse may no longer be eligible to receive the death benefit. In some cases, the policyholder may need to update their beneficiary designation to reflect this change.
• Court order: A court may order a change in beneficiary, for example, in cases of divorce, child support, or legal disputes.
• Insurable interest: In some cases, a person or entity may have an insurable interest in the policyholder’s life, such as a business partner or creditor. If the policyholder defaults on a debt, for instance, the creditor may have the right to change the beneficiary to themselves.

It’s worth noting that the life insurance company typically has no say in who the beneficiary is unless there are legal reasons to do so. The beneficiary designation is a legal contract between the policyholder and the insurance company, and the company is legally obligated to follow the policyholder’s wishes, as long as they are legally valid and enforceable.

In summary, a life insurance company can change the beneficiary of a policy under certain circumstances, such as at the policyholder’s request, due to divorce or separation, by court order, or if there is an insurable interest.

However, in general, the beneficiary designation is a legal contract between the policyholder and the insurance company, and the company is legally obligated to follow the policyholder’s wishes.

Asked July 13, 2010 by Andy Villena