Understanding the Problem
When an insured person passes away, life insurance proceeds typically go directly to the named beneficiary. If that beneficiary then dies before the insurer pays the claim, determining who receives the proceeds depends on whether the beneficiary legally survived the insured and what the policy says about contingent beneficiaries and estate payment.
Apply the Law
Key Requirements
Review the policy for any required survival period and for primary and contingent beneficiary designations. If the primary beneficiary satisfied the applicable survival requirement, the claim generally belongs to that beneficiary’s estate unless the policy provides otherwise. If the primary beneficiary is treated as having predeceased the insured, the insurer generally looks next to a surviving contingent beneficiary and then to any applicable estate provision in the policy.
What the Statutes Say
Under N.C. Gen. Stat. § 28A-24-2, when a right or benefit depends on one person surviving another, a person who is not shown by clear and convincing evidence to have survived by at least 120 hours is generally deemed to have predeceased the other person.
The 120-hour rule has exceptions. Under N.C. Gen. Stat. § 28A-24-6, the policy or another governing instrument may address simultaneous deaths, dispense with a specified survival period, or impose a different survival period. The policy language therefore must be reviewed before deciding whether the proceeds belong to a contingent beneficiary, the named beneficiary’s estate, or the insured’s estate.
Analysis
Process & Timing
Contact the insurer and request its claim forms and documentation requirements. The requested materials commonly include:
- A certified death certificate for the insured.
- A death certificate for the named beneficiary, if applicable.
- The insurer’s completed claim form.
- The original policy, an affidavit of lost policy, or the policy number.
- Letters testamentary or letters of administration if an estate is claiming the proceeds.
Under N.C. Gen. Stat. § 58-58-110, an insurer that does not pay death proceeds within 30 days after receiving satisfactory proof of loss generally must pay interest on unpaid proceeds, subject to the statute’s terms. A certified death certificate is one form of satisfactory proof identified by the statute.
Exceptions & Pitfalls
Do not assume that a contingent beneficiary receives the proceeds simply because the primary beneficiary died before the check was issued. If the primary beneficiary satisfied the applicable survivorship requirement, the proceeds generally belong to that beneficiary’s estate unless the policy says otherwise. Conversely, if the beneficiary failed the policy’s survival requirement or North Carolina’s default 120-hour requirement, the beneficiary may be treated as having predeceased the insured.
If an estate must claim the proceeds, a probate estate may need to be opened and a personal representative appointed. The clerk of superior court has jurisdiction over the administration, settlement, and distribution of decedents’ estates under N.C. Gen. Stat. § 28A-2-1. If multiple parties claim the proceeds or the insurer refuses payment, additional legal proceedings may be necessary to determine the proper recipient.
Conclusion
In North Carolina, the policy controls subject to applicable law, and the key threshold is usually whether the named beneficiary survived the insured by at least 120 hours. If so, but the beneficiary dies before payment, the proceeds generally are claimed through that beneficiary’s estate unless the policy says otherwise. Review this guide to claiming life insurance when the beneficiary dies before payment, then obtain both death certificates and contact the insurer.
Talk to a Probate Attorney
If you face challenges claiming life insurance benefits in North Carolina, contact Pierce Law Group at [email protected] or (919) 341-7055 for a free case evaluation.
