When a loved one passes away unexpectedly, there could be much dispute over the life insurance policy that they left behind – especially if it has not been updated in a while. For example, let’s say that your husband has passed away and that he has not updated his beneficiaries since his previous marriage, in which his ex-wife could receive benefits. You feel as if your husband would have left money behind for you and may be wondering if you can dispute this and sue for life insurance proceeds.

The Most Common Reasons for Life Insurance Disputes

sue for life insuranceThere are various reasons that life insurance proceeds may be disputed, and only some limited situations can be disputed, in which you should speak with an attorney. An attorney would be able to provide a thorough insight into what exactly you can and can not do in terms of suing for life insurance benefits. While each situation may vary, the most common reasons for dispute usually pertain to marriage, divorce, childbirth, remarriage, adoption, and really anything pertaining to a change in the immediate family. These changes can be undocumented in terms of a life insurance policy and can leave many people upset as to why they did not receive proceeds.

Another common reason for a life insurance dispute is when there is a seriously ill policyholder that makes last minutes changes before their death. This is usually when there is a real chance of a dispute, considering that the policyholder may not have been of sound mind when he/she made last minute changes on the policy. Potential beneficiaries may claim that the policy was altered at a time where their loved one was not able to coherently make decisions and that therefore whoever had them change the policy beneficiaries could have been taking advantage of the sick individual. Overall, these are the main reasons that life insurance proceeds may be disputed.

Disputing Life Insurance Proceeds – What are the Odds?

Disputing life insurance proceeds almost always becomes a courtroom issue and becomes a matter for the court to decide. Life insurance companies will not make the decision, because they are unaware of who is legitimate and who is not, which is why it almost always goes to court, in which the judge makes that decision. After evidence is presented, the judge could either rule that the original beneficiaries should receive the proceeds or that the beneficiaries were legitimately updated, in which they will receive the proceeds. At the end of the day, the life insurance company will agree with what the courtroom decides and issue the money to whoever won the dispute.

With that being said, most cases have a difficult time disputing beneficiaries to prove their case before a judge. Insurance policies are signed contracts – which makes it almost impossible to dispute. It is also difficult to prove fraud, in which a policyholder was taken advantage of and was coerced into changing a beneficiary by someone who only came into their life toward the end.

Suing for Life Insurance Proceeds – What’s the Cost?

Disputing a life insurance policy is already legally difficult, but the amount of time and money that it cost really makes it that much more challenging. If there is not a positive outcome, all of that time and money goes right out the window, in which you are out money instead of receiving any. While the proceeds are in dispute, the life insurance company places the payout in a trust that is held by the state. In the meantime, there will be fees and taxes that accrue on the payout, and the situation is exceedingly expensive.

For that reason alone, many cases will go to mediation or arbitration, in which they avoid the high cost and expenses associated with disputes or going to court. It also saves you the money that you would lose if you were to lose the case as well. More often than not, the two sides will work out some sort of an agreement and ultimately split the proceeds, which saves everyone from a time and money consuming battle over the payout.

How to Make Sure That There are no Disputes

As stated previously, the process of disputes over insurance proceeds is extremely time and money consuming, which is why you should head off any disputes before they happen. You should review your life insurance policy on a regular basis and should meet with your life insurance agent, which he or she should stay in contact with you and ensure that everything is still in place. It also is extremely important to have witnesses whenever you are making controversial changes, such as changing beneficiaries. This will save trouble over time and ensure that the people you wish to receive your proceeds will, and that there will not be any dispute whatsoever.


  1. Hello, so my mother passed away 3 months ago and left a life insurance policy and I’m pretty sure she never gave them a beneficiary, there for the insurance company is about to pay out to her husband, which she was separate from when she passed. But I have a text message of my mother asking for my social security so she could put me as her beneficiary. What should I do?

    1. You can contact the life insurance company and see if they can help. Most likely, the estate will go through probate and you can make your case to the court. You will probably not get paid by the insurance company because they will argue that your mother could have changed her mind. Signaling intent to make someone a beneficiary is not necessarily the same as doing it. It is unfortunate that your mother did not fill out the paperwork.

  2. My sons father past away and left behind around 9 kids. We believe the life Insurance was left to his mother or someone he was married too only for extra money while in service. Do you think the kids should get some of the money? Is it worth it to sue the beneficiary?

    1. I don’t believe you have a legal reason to sue the beneficiary, but you can consult with an attorney who specializes in this. Perhaps if there is overdue child support or something of that nature there can be recourse.

  3. My father passed in March 2020. In 2015, he designated a now ex-girlfriend. They never married or had children. They had been broken up for a couple of years at the time of death, he even had a current live-in girlfriend. Can we (his 4 daughters) sue?

    1. Andrew @ LifeAnt

      Hi Debbie,
      Unfortunately no, there is nothing for you to sue about. Your father would have been responsible for designating the proper beneficiaries, but it was ultimately his decision to do so. Even though you feel wronged by this, it doesn’t matter from a legal standpoint that his beneficiary was his ex-girlfriend. It doesn’t matter that they never married or that they split up, because it’s still up to him to designate somebody and change it if needed. And if he never changed it, then unfortunately there isn’t anything you can do at this point.

  4. My friend is single. He just passed away and left his life insurance for me as a primary beneficiary, my two sons (his god-children) are contingent beneficiaries. Can his family or association file a dispute?


    1. Andrew @ LifeAnt

      Hi Jane,
      No, they can’t. The owner of a life insurance policy is solely responsible for designating beneficiaries, no matter who they are. Sometimes family members expect to be named as a beneficiary but then they find out that the family member gave their money to a charity, so this does happen quite frequently. It’s not your fault that you were named as the beneficiary, but his family won’t be able to do anything about it anyways.

  5. My father-in-law’s ex-wife bought life insurance on him and filled out all the paperwork for him, and listed herself as the beneficiary. She listed her son as the contingent on an old life insurance policy they bought 10 years ago. My father-in-law signed everything and it was filed and he forgot about it.

    They divorced last year and she relinquished all rights to the life insurance policy in their divorce paperwork. A year before the divorce, she convinced my father-in-law to adopt her 23 year-old adult son. My father-in-law had been diagnosed with Lyme disease 5 years prior, and was suffering from it’s negative neurological effects and wasn’t of sound mind when he adopted her adult son.

    My father-in-law died this year and his ex-wife’s son is receiving the entire amount of his life insurance. Since my father-in-law was not well emotionally or physically, he forgot about the policy and his biological son, my husband, was unintentionally left off as a beneficiary.

    Is this a situation where it is pointless to sue his adopted adult brother for the life insurance proceeds?

    1. Andrew @ LifeAnt

      Hi Jennifer,
      You can always speak to an attorney because we can’t offer legal advice, and it’s possible an attorney would be able to find a way to make this happen. However, just a preliminary reading of the situation makes it appear unlikely that you could sue successfully. It would be nearly impossible to prove that your father was of unsound mind and actually meant to give everything to his son, especially when he signed off on everything. But you can speak to an attorney to double check.

  6. My exwife has passed away and I am the sole and I’m the main beneficiary. She had a FEGLI policy that is ruled by federal law. I live in IL, the newest state to deny exspouses from receiving insurance payouts. There was no court order on file to assign myself or another person as a beneficiary. Her parents tried to file for the claim and was denied. The insurance company put a 45 day hold on the payout. The parents are just trying to delay the payout and are not going to contest it. After the payout… can I be sued? If so… does state law take over? The policy was issued under federal guidelines… does this change if it’s thrown to the state courts?

    1. You will need to consult an attorney Jonny. I don’t know the specifics of the laws around this in your jurisdiction and it is surely complex.

  7. Question: Divorce decree states husband and wife will keep life insurance policy, with each other as beneficiaries, until 2031. If husband changes beneficiary, against the decree and names his children, could wife sue the children for the life insurance or would she sue the estate of the husband?

    1. The life insurance company could never pay out the claim. They should be provided a copy of the divorce decree to keep on file so that the beneficiary is not changed. If for some reason it is, you should consult an attorney. The suit is most likely with the beneficiary who received the payout since the life insurance bypasses the estate.

  8. Can I sue for a policy taken out on me I never signed off on?

    1. This is illegal. You should contact the life insurance company as well as your state insurance bureau.

  9. Divorced in December 2020, ex husband signed agreement that he would continue paying life insurance and I would be the beneficiary. He lied because the policy had already lapsed in 11/2020. I never received notification of a lapse as the beneficiary and we paid the life insurance premiums for 20 years. We have 2 minor children.
    Please advise,

    1. Hi Gail, unfortunately, it is on the owner of the policy to keep it in force. Beneficiaries are not typically notified of a lapse. If a condition of the divorce agreement is that he maintains a life insurance policy, you can pursue this legally with him. If it comes to a suit, it sounds like you are in the right. A mediator or judge may decide that you get another benefit of equal value or require him to obtain a new policy. You do not have recourse with the life insurance company at this point.

  10. Appreciate your advise!

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