How to claim life insurance proceeds if the named beneficiary dies after the insured but before payment?

Detailed Answer

When an insured person passes away, life insurance proceeds typically go directly to the named beneficiary. But what happens if that beneficiary dies after the insured but before the insurer pays out? In North Carolina, the answer depends first on your policy language and then on state law.

1. Review your policy for contingent beneficiaries. Most life insurance contracts allow you to name one or more contingent beneficiaries. If your primary beneficiary is not alive at the time of claim, the insurer will look to any contingent beneficiary you named. If a contingent beneficiary survives the insured, the insurer must pay them according to the policy terms.

2. If you did not name a contingent beneficiary or if all contingents have also passed away, the insurer generally must pay the proceeds to the insured’s estate. Under North Carolina law, death benefits that have no living designated payee become part of the decedent’s estate and pass under the intestate succession statutes or under the terms of the insured’s will. See N.C. Gen. Stat. § 28A-2-1 (defining inheritance of personal property).

3. Check for an anti-lapse clause. Many policies include an anti-lapse provision that protects certain beneficiaries, such as a spouse or lineal descendant. Under N.C. Gen. Stat. § 58-33-2, if the deceased beneficiary was the insured’s spouse or direct descendant and no contingent beneficiary exists, the proceeds may pass to the beneficiary’s estate or to that beneficiary’s heirs, depending on the policy’s wording.

4. Gather required documents and file your claim. To initiate payment, submit the following to the insurer:

• Original or certified death certificate of the insured.
• Original or certified death certificate of the named beneficiary (if applicable).
• Completed claim form supplied by the insurance company.
• Copy of the life insurance policy or contract number.

5. Resolving disputes. If the insurer refuses payment or if multiple parties claim the proceeds, you may need to open a probate estate and seek a court order directing the insurer to pay. The clerk of superior court in the county where the insured lived can guide you through opening probate and petitioning for distribution of the assets.

Key Points to Understand Your Rights

• Always name both primary and contingent beneficiaries in writing and update them after major life events.
• If your beneficiary dies before you or before payment, the insurer follows policy terms first, then North Carolina’s intestacy rules under N.C. Gen. Stat. § 28A-2-1.
• Look for an anti-lapse clause for spouses or descendants in your policy. That clause can shift proceeds to heirs or the beneficiary’s estate under N.C. Gen. Stat. § 58-33-2.
• Collect all death certificates and the original policy when you file a claim. Insurers require proof of death for both insured and beneficiary.
• If the insurer denies your claim, you may need to open a probate estate and seek a court order for distribution.

If you face challenges claiming life insurance benefits in North Carolina, Pierce Law Group can help. Our attorneys understand how to navigate policy provisions and state law to secure the proceeds you’re entitled to. Contact us today by emailing intake@piercelaw.com or calling (919) 341-7055.