Dallas Fort Worth Insurance Lawyer Blog

It is often times very difficult to answer the titled question.  When there us uncertainty as to who is entitled to life insurance proceeds there is a process by which the life insurance company can “interplead” the life insurance proceeds into the registry of the Court.  These are situation where the life insurance company knows they owe the life insurance money because the insured has died.  What they sometimes don’t know is, who is entitled to the money.  This interpleader process allows those who believe they may have an interest in the proceeds to litigate their respective interests.

This issue was presented in a 2022 opinion from the Northern District of Texas, Dallas Division.  The style of the case is Sun Life Insurance Company of Canada v. Elizabeth McKinney, Tisha Diante, and Teresa Morris.

Here, Sun Life knew they owed the life insurance proceeds to someone, but was not sure who.  After filing a lawsuits to interplead the money, the life insurance company must serve the potential beneficiaries with legal papers so that they may come to court and litigate between themselves as to who is entitled to the proceeds.  In this case, Sun Life was having difficulty locating McKinney to have her served with the legal papers.

Life Insurance Lawyers know that just as there may be disputes whether coverage took effect before the insured died, there may also be disagreements over whether coverage terminated before the insured’s death.  This is illustrated in a 1979, Fort Worth Court of Appeals opinion styled, Leach v. Eureka Life Ins. Co. of America.

This case is an appeal from a court ruling against Leach after she filed suit against Eureka.  The life insurance policy at issue was a Credit Life Insurance policy.  The policy was to pay the remaining balance of a loan in the event the insured died before the loan was paid or September 13, 1977.  The insured, Tommy Leach, was killed in a car accident at or around September 13, 1977.  There were no witnesses.  The death certificate for Tommy Leach shows the time of injury and death as 12:45 a.m., September 14, 1977.

The insurance company alleged that Leach was killed September 14, 1977.

Life insurance attorneys will run into a surprising amount of cases that are unique unto themselves.  This case is that way.  The Facts are long but need to be understood to understand how the Court ruled the way it did.  This is a 1959 opinion from the Texas Supreme Court.  It is styled, Republic Nat. Life Ins. Co. v. Hall.

Ms. Hall sued Republic after Republic denied her claim for life insurance benefits for the stated reason that the contract was never completed.

There has not been any material dispute about the facts, which in substance are as follows: The deceased, who resided in California but was President of Weatherford Manufacturing Co., of Weatherford, Texas, made application at Weatherford in the latter part of March 1949, for a twenty-year-payment type of policy in the amount of $20,000 through a Mr. Coder, the local soliciting agent of petitioner, on petitioner’s usual printed form, which Mr. Hall, of course, signed.  At that time, Mr. Hall was 36 years old, and was evidently understood by himself and the soliciting agent to be in some undetermined degree “overweight” from a life-underwriting standpoint, so as probably to require of him a premium higher in some unknown amount than that of approximately $640 per year, which was normal for an applicant of his age.  The agent testified that he told Mr. Hall, “I didn’t know what the rate would be; that it would have to be a special rate case.” At the same time he testified as follows:  “Q. What did George (Mr. Hall) tell you in response to that; he told you he wanted the insurance?  A. Yes; I told him that was what we could get.”  Mr. Hall’s secretary was allowed to testify that on the date of the application and in the presence of the agent, Mr. Hall told her that he was going on a trip to the West, wanted insurance and that “when these policies came in I was to put them in the safe.”  (A “group” policy was also involved in the negotiations but not in this suit.)  Previously to these transactions, Mr. Hall had been negotiating with another company than petitioner and had been quoted an annual premium rate of $40 per $1,000 of insurance but had evidently gone no further with these negotiations, and told petitioner’s agent, “I want you to beat that other man’s premium.”  It was also understood between Mr. Hall and the petitioner’s agent that, Hall being a licensed airplane pilot, accustomed to fly the plane of his company on business trips, the insurance would include coverage for death suffered in any such flight, the additional premium for such coverage being an amount evidently not subject to variation and Hall having executed contemporaneously with his application the usual company form questionnaire describing his flying activities.