What are the legal rights of the beneficiary when someone contests the named beneficiary on the policy after the insured dies?

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What are the legal rights of the beneficiary when someone contests the named beneficiary on the policy after the insured dies?

My mother passed away 2 1/2 months ago. On her life insurance policy she named myself and husband as her beneficiaries. My brother is constesting the beneficiary and now the insurance company is holding up payment until they can do some investigating. Is there a statute of limitations and can they really just go off the word of a disgruntled sibling?

Asked on June 18, 2012 under Estate Planning, Arizona

Answers:

Anne Brady / Law Office of Anne Brady

Answered 9 years ago | Contributor

It sounds like your insurance company is just being prudent.  They are not going off the word of your brother, they are investigating his claims.  If they paid you off without doing so, and later it turned out his position had merit, they would be on the hook.  Because Arizona considers a bad faith claim against an insurance carrier to be a tort, the statute of limitations for bringing a bad faith claim is two years.


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