Life insurance would “prefer” to pay to estate instead of requested beneficiary.

Hello, a friend of mine (a life long bachelor with no dependents) just passed. He had told me he had a life insurance policy the would take care of my girls. He did, but as it turns out, the company previously decided that my girls don’t have an insurance interest and they will pay out to the estate. I thought insurable interest is only for the policy holder and he can chose the beneficiary. I came across an email string from his insurance agents that (erroneously?) explain this. Someone should have at least told him he would need a will if it pays to the estate. He took the policy out himself and there is no written will to be found, but there is a clear pattern of intent.

Asked over 1 year ago in Alberta
Categories: Wills, Estates, Trusts  Insurance

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Oops. *insurable interest*

Posted over 1 year ago

Katherine MacRae

Answer by Katherine MacRae

VerifiedAlberta lawyer

If a designation was made on the policy, then, pursuant to the Insurance Act, the named beneficiary receives the insurance proceeds directly.

If the deceased's estate was named beneficiary of the life insurance policy, then the estate must be probated, and if there is no will, the Wills and Succession Act will determine who the beneficiaries of the policy are.

Posted about 1 year ago

Please note that this is for informational purposes only and does not constitute legal advice to you. Legal advice pertaining to your particular situation can only be provided by a lawyer who has met with you to obtain all pertinent background information necessary to give you a formal legal opinion. For formal legal advice, hire a lawyer (many give a free first consultation). Contact Katherine MacRae, or search the Lawyer Directory.

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