We recently got a call from a person who had received notice from a U.S. government agency that an employee had passed away, only his wife was listed as a beneficiary of death benefit, and that the agency had information that the wife had died after the employee died. The government agency said that it would pay the death benefit to the estate of the wife if someone would initiate a probate proceeding for the wife. In this case the probate proceeding would probably give the death benefit to the next of kin of the wife. See Probate Words and Terms. (Incidentally, if you want to know if someone is alive or dead and you have that person's social security number you can call the Social Security Administration and they will tell you if they have information that the person is alive or dead. This is public information.)
INSURANCE ON HOMES AND AUTOS IN PROBATE:
Suppose Husband and Wife live in House, but House is titled only in name of Husband. Suppose Husband dies and Wife continues to the live in the House without bothering with a probate. As long as Wife pays the taxes and utilities and assuming no one else comes forward to claim the House, Wife will appear to be enjoying the House without having bothered with a probate.
The problem here is that House will be insured in Husband's name. Now, let's say the house burns down. Wife has been making the House insurance payments faithfully after Husband died so she expects Insurance Company to pay for the cost of rebuilding House. But, when she makes the claim Insurance Company may say, "Too bad. You are not the insured. We don't have to pay." (Whether Insurance Company can actually get away with this denial is a complicated issue.) To avoid this problem there should be a probate transferring title of House to Wife.
Likewise, when someone dies, even if the heirs undertake a probate they should contact the insurance company insuring the house and advise of the death of the owner and ask what paperwork is necessary to make sure that there is coverage during the probate process.
Another problem arises with autos. What happens if the estate Executor is driving the car of the person who died while trying to sell the car and there is an accident that is the fault of the Executor. The executor will want insurance protection. Therefore, when someone dies the executor should inform the insurance company of the decedent's vehicles and arrange for coverage through the estate proceeding.
ACCIDENTAL DEATH INSURANCE:
Fortunately, America is a pretty safe place and most Americans, don't die from an accident. Instead, most of us die from a disease, or plain old age.
So it is not surprising that a number of insurance companies offer accidental death life insurance (also called accidental death insurance or accidental life insurance) or mortage insurance that pays off only if the mortgage borrower dies in an accident. Large death benefits can be offered for small premiums because it is unlikely that there will ever be a payment of a death benefit.
As people get older, the distinction between an accidental death and a death from a disease can get blurry. For example, Grandpa, who has a history of strokes, is found dead face down on his floor with a bruise on his forehead. Did he just stumble and fall and smack his head so hard on the floor that it killed him? Or did he have a stroke that caused him to fall and maybe he died from the underlying stroke or maybe he died from the fall which was caused by the stroke. This is an issue that can involve a lot of money and one that we as attorneys prepared to litigate against insurance companies can help you with.
However, it should be noted that the medical phrase, "cerebral vascular accident," means the same thing as stroke. If the cause of death is "cerebral vascular accident," this diagnosis is not going to help make a claim under an accidental death policy. Sometimes on a death certificate the phrase, "non-traumatic cerebral vascular accident" is used to make clear that death was caused by an ordinary stroke. But at other times the shorter phrase, "cerebral vascular accident" is used to mean the same thing. Only a cause of death listed as "traumatic cerebral vascular accident" would suggest an accident that would trigger a payment under an accidental death life insurance policy.
Because the distinction between an accidental death and an old age death gets confusing in very old people, many accidental death life insurance policies terminate at a particular age, say 65. But, sometimes we see that the accidental life insurance company, knowing full well the insured's age, continues to collect and accept premium payments beyond the age they say the offer insurance. In such a case, the insurance company should pay up if there is any decent argument that the death was accidental.
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