Beneficiaries are treated as tenants in common, meaning each person or estate is entitled to half of the policy’s benefit. If one beneficiary passes, the surviving beneficiary is not entitled to the other half. The deceased beneficiary’s share will go to their estate?
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This gave me a headache just trying to understand it.
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Your terminology and understanding are incorrect. The beneficiary designation will clearly state whether they are per capita or per stirpes (by right of representation).
When I started as a young agent at Prudential 40 years ago, I noticed the default beneficiary designation in their policy was per capita. This meant if there were two beneficiaries, like you and Joe, and Joe passed away, you would get the entire policy proceeds. While that may have worked for young people with minor children, I talked with our settlement options team and they realized that a per stirpes distribution was a better default option. Eventually, they changed it.
The default designation only matters if you haven’t specified how you want your beneficiaries treated. When you fill out a policy application, you’ll be asked to choose either per capita or per stirpes.
If a beneficiary has passed away, just ask the insurance company how the designation was set up for that policy.
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I Was told this from New York State Unclaimed Funds
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What can I say? They have no clue what they’re talking about. “Tenants in common” would function like a per stirpes distribution, where a deceased beneficiary’s estate gets their share. But “tenants in common” is a term for real estate ownership and has nothing to do with life insurance beneficiaries. However, since you’re dealing with a state government entity, there’s no telling how they’ve messed it up.
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I understand and once it goes to unclaim i cant deal with the insurance company since they released funds to the state right?
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Maybe. If you were a named beneficiary that should give you some standing to chase down what the policy was and what it actually said in its bene designations and if that doesn’t match what NY State thinks you may need that information. Give it a try tomorrow and see what happens. Keep us posted.
Was it a significant death benefit? If so you might be better off hiring an attorney to chase all this down for you but that would be costly.
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I received a portion of half but state hold other half
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If it’s a per capita distribution, you’d be entitled to the full death benefit. Definitely contact the insurance company and request a copy of the application that’s attached to the policy. It will show which type of beneficiary designation was chosen. Another option is to try and find the selling agent. Many agents, like me, keep copies of all their applications for years.
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Ok do you have any knowledge on First Sunamerica Life Insurance Company
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It looks like they merged with US Life in 2011. You can track down more details by searching the merger online.
Here’s the link for reference:
SEC Merger Document
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Us life stated they dont have any policies frombthat company
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You’ve seen the SEC announcement. Each state has an insurance commissioner, and their office should be helpful. Write a letter to the commissioner, include the old policy details, and ask for the beneficiary designations on that policy. They should be able to assist you in getting the information.
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The only correct answer is what the contract states. Most contracts treat beneficiaries as per capita, meaning if there are two primary (class 1) beneficiaries, the proceeds are split equally. If one passes away, the surviving beneficiary receives 100%. Contingent (class 2) beneficiaries are only paid if all class 1 beneficiaries have passed.
You can override this with specific instructions.
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I agree with you! The beneficiary that’s still alive should receive 100% if the primary beneficiary was split equally between two people
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Look up the definitions of per capita and per stirpes beneficiary designations.
It varies based on which one applies.
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There are two types of beneficiary designations: per stirpes and pro rata. You can look them up to decide how you want to list your beneficiaries. When filling out the form, you would write one of these designations next to each person’s name. For example, if you have two beneficiaries at 50% each, one can be pro rata, and the other per stirpes. You can change your beneficiary form at any time and update it multiple times a year if needed.