Under a life insurance contract, payment must be made to a beneficiary as directed by the terms of the policy. An insured, however, may reserve the right to change the beneficiary under the contract. If the insured elects to change beneficiaries, the second beneficiary will be entitled to death benefits and the first beneficiary’s interest will be terminated. However, the first beneficiary may contest the validity of the change by reason of the insured’s incapacity or the exertion of undue influence.
The capacity required is the same as that required to make a will. Thus, at the time the insured changed beneficiaries, he or she must have had sufficient understanding to comprehend the nature of the transaction, the nature and extent of death benefits, and to whom he desires to give it, without aid of any other person. On the other hand, “undue influence” is usually defined as such overpersuasion, coercion, force, or deception that breaks the will power of the insured, placing it into the hands of another. In determining whether there is evidence of undue influence, a court does not have to find the insured to be of unsound mind. Therefore, one may be unduly influenced while still mentally competent.
If you have been denied on life insurance or accidental death and dismemberment benefits, you should consult an attorney to hear about your recovery options.