What Happens if a Beneficiary Forfeits a Life Insurance Policy?

Seeking Advice
1

Hello guys…

I’m trying to understand the process and implications if a beneficiary decides to forfeit a life insurance policy. Here’s the situation:

  • Forfeiture: If a beneficiary, such as the husband of the deceased, decides to forfeit their claim to the policy, what happens to the money?
  • Routing: Can the forfeited funds be redirected to another beneficiary, such as the deceased’s son, or does the money go elsewhere?
  • Process: What steps need to be taken for the forfeiture to be processed, and how is the decision documented?

Any insights or experiences on this topic would be greatly appreciated. Thanks in advance…

2

If you want detailed information about your situation, I recommend referring to the life insurance policy documents and, if necessary, seeking advice from an estate planning attorney.

3

If a beneficiary decides to forfeit their claim to a life insurance policy, the funds are typically redirected according to the policy’s beneficiary designation order. If the primary beneficiary forfeits, the proceeds usually go to any secondary or contingent beneficiaries listed in the policy. If no such beneficiaries are named, the funds may be directed to the deceased’s estate. To process the forfeiture, the beneficiary must submit a formal written notice to the insurance company, which will then update its records and distribute the funds as per the beneficiary designations. It’s important to keep all documentation related to the forfeiture for your records.

1 Like
4

Thank you for this information