Although most beneficiaries are aware of being listed in life insurance policies, some may not be notified by the policyholder, resulting in unclaimed benefits. Here is a look at essential life insurance beneficiary laws in Florida.
How does life insurance work in Florida?
Every state has its own laws concerning various types of insurance. The life insurance beneficiary laws in Florida differ from many other states; therefore, it’s important to learn the relevant state laws on life insurance before you sign up for the policy. For instance, when there are inconsistencies between a person’s will and their life insurance policy regarding beneficiaries, Florida courts will side with the life insurance policy.
There are also times when a Florida state court must decide on life insurance benefits under certain conditions. Two of the most common disputes that go to court stem from improper beneficiary changes to a policy and beneficiary fraud, such as when a policyholder is coerced into changing their policy.
Who can be a life insurance beneficiary in Florida?
A life insurance policy can provide benefits to people, organizations, and businesses. Children, however, cannot be beneficiaries in Florida. If a child is named as a beneficiary in a plan, the court assigns the case to a guardian who manages the fund until the child becomes an adult.
The process of receiving death benefits
Upon your death, your insurer will attempt to locate and pay the benefits to the beneficiary named in your life insurance plan. If that person has died or is considered an invalid by the court, the insurer will move on and try to locate an alternate beneficiary. If the agency cannot locate either person, it will send the death benefits to your estate.
Can divorce affect beneficiary designation?
Life insurance beneficiary laws in Florida view divorce as termination of beneficiary status, making the listing in a policy invalid. However, the policyholder may choose to reaffirm the ex-spouse as a beneficiary, particularly when parents split but still must plan ahead for their children.
When the policyholder dies, their spouse or ex-spouse may receive benefits from their employment life insurance plan. This type of life insurance is overseen by the Employee Retirement Income Security Act of 1974 (ERISA). A claim involving a plan governed by ERISA is handled on the federal level and supersedes Florida law.
Life insurance is one of the fundamental ways of showing family members you care for their future wellbeing. Contact our team at Locke Insurance Group today for answers to questions you may have about life insurance.