Family Law Prof Blog

Editor: Margaret Ryznar
Indiana University
Robert H. McKinney School of Law

Friday, December 2, 2005

Case Law Development: Insurance Company's Duty to Protect Ex-Spouse as Beneficiary of Life Insurance

So just how does one insure that an ex-spouse complies with the divorce decree ordering them to retain a particular beneficiary on a life insurance policy? This Georgia case shows that even the most diligent efforts may not be enough... Wife sued her deceased ex-husband’s insurance company for promissory estoppel and breach of a duty to investigate after her husband changed the beneficiary on his life insurance weeks before his death. Under their divorce decree, Husband had agreed to keep Wife as the beneficiary in the policy. Wife had gone to considerable lengths to notify the insurance company of the divorce decree and secure their cooperation in seeing that the policy not be changed. The company, however, agreed only to send her duplicate notices of any defaults and to “consider the decree” if any change in the policy were sought. The Georgia Court of Appeals held that the promise to “consider” the decree was not one that would induce reasonable reliance by the wife and that, as a third party to the policy, the company had no independent duty to investigate whether she had any interest in the policy proceeds.

McReynolds v. The Prudential Insurance Company, 2005 Ga. App. LEXIS 1300 (November 23, 2005)

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