Understanding the Basics: What is Life Insurance?
Life insurance is designed to provide protection and financial security to your loved ones in the event of your unexpected death. It is a contract between you and an insurance company, where you make regular premium payments in exchange for a payment, known as the death benefit, to be paid out to your beneficiaries when you die. Life insurance can help cover funeral expenses, outstanding debts, mortgage payments, and provide a source of income for your family. To best plan, you should understand the different types of life insurance policies and how they can best fit your needs.
New York court awards policy to estate
In Protective Life Insurance Company v. Mehrkar, the federal court for the Southern District of New York considered a dispute regarding life insurance benefits between the estate and the ex-wife of the insured. Facing conflicting claims to the life insurance benefits, the insurance company filed an interpleader in federal court. The court decided that the estate of the insured should receive the disputed life insurance benefits, not his-ex-wife.
Department of Labor settles with Mutual of Omaha
An example I see often is an employee who enrolls in a group life insurance plan through their work and has the premiums deducted from their paychecks. The employee, and their family, reasonably believes they are covered. But when they die, the life insurance company decides they were never eligible in the first place and refuses to pay the claim. This isn’t just a theoretical concern, I get calls from grieving beneficiaries all the time.
California beneficiary dispute
Most often, the owner of a life insurance policy purchases the coverage voluntarily to benefit a loved one of their choice. But occasionally, the owner purchases a policy to fulfill an obligation imposed by a contract or by a court.