Life Insurance Change Of Beneficiary

It is not uncommon first a life insurance lawyer to run across a situation where the issue is, Did the insured change the beneficiary of the life insurance policy.
Here is a 1953, Texas Supreme Court opinion dealing with this issue.  It is styled, Creighton v. Barnes.
Petitioners, the mother, daughter and a sister of B. B. Barnes, as the named beneficiaries of the two Jefferson Standard Life Insurance Company policies, filed this suit against the Insurance Company for the proceeds of the two policies.  The Insurance Company answered with an interpleader suit, wherein it impleaded respondent, the third wife and surviving widow of B. B. Barnes, and said that all of the petitioners and the respondent were claiming the right to the proceeds of both policies, and tendered the money into court, and asked the court to decide which of the claimants were entitled to receive the funds, and asked that it be discharged with its costs and attorneys’ fees.  Respondent answered claiming the proceeds by virtue of the will of B. B. Barnes.
It is stipulated that the petitioners are the ones named as beneficiaries in the two policies, and entitled to recover the proceeds thereof unless B. B. Barnes changed the payment of these proceeds in favor of his wife by the provisions of his last will and testament, which had been duly probated at the time suit was brought.
Each of the Jefferson Standard policies contained the following provisions regarding the change in beneficiary:

“Provided this policy be not assigned, the assured may at any time, and from time to time, change the beneficiary hereunder, such change to take effect upon the written endorsement of the same upon the policy by the Company”.On the back of each of the policies, in a special section headed “Register of Change of Beneficiary”, was the following provision:

“Note: No change, designation, or declaration shall take effect until endorsed on this Contract by the Company at the Home Office”.

It is stipulated that neither of the policies had been assigned to any one, and there is no question raised on that score.  It is also stipulated that B. B. Barnes never forwarded any request for a change of beneficiaries to the Insurance Company.  Such regulations on the part of the Company have been upheld by our courts many times.
It seems to be definitely settled that an insurer may make reasonable regulations in the policy, or in the constitution and by-laws which become a part of the policy, defining the method by which a member may change the beneficiary named in the certificate, and, when the beneficiary is a third party, such regulations become a part of the contract; and, generally speaking, the right to change can be exercised in no other way; that, while the insurer may waive compliance with regulations intended for its benefit, yet the beneficiary named in the certificate has a right, by virtue of the contract, to require that a change be made substantially in accordance with the manner provided.
Let us examine the facts in this case to see if B. B. Barnes did all he reasonably could have done to comply with the provisions of the policies as to a change.  Jefferson Standard policy No. 727,036 was dated February 15, 1941 and payable to Helen Elizabeth Barnes (a former wife) if living, otherwise to June Colleen Barnes, a daughter and now Mrs. Creighton.  These beneficiaries had been changed upon request of B. B. Barnes by a rider dated February 23, 1942 and attached to the policy, so as to be made payable to the daughter, June Colleen; the mother Youda Barnes, and the former wife, Helen Elizabeth, in certain definite shares.  This change had been duly noted under the special section “Register of Change of Beneficiary”.  Jefferson Standard policy No. 806,705 was dated December 3, 1943, and payable by rider attached at the time of issuance of the policy, to Lucille Barnes (another former wife); June Barnes, daughter; Youda Barnes, mother; and Clara Barnes, sister, of B. B. Barnes.  There was no change of these beneficiaries by B. B. Barnes.
To permit a change of beneficiary by will in disregard of provisions in a policy which have the same or similar requirements as to method of change, as these two policies of insurance here, would bring about much uncertainty and litigation as to payment of life insurance policies.  Prompt payment of life insurance to those who are the beneficiaries is of inestimable importance to those who are left behind at the death of an insured.  Delay and confusion resulting in unnecessary hardships should be avoided.
Under the facts of this case, B. B. Barnes did not comply with the policy provision with regard to change of beneficiaries in these two policies, nor did he do all he reasonably could have done to bring about such change.  Therefore, the beneficiaries named in the policies, and who are the petitioners herein, are entitled to recover the proceeds of both policies as their interest appears.
Contact Information