Life insurance interpleader lawsuits are unique legal actions that arise when the insurance company doesn’t know who should receive the death benefit. Rather than risk paying the wrong person, the company files an interpleader action and deposits the funds with a court. From that point forward, the beneficiaries or potential claimants are left to resolve the dispute through litigation.
This article provides a national overview of how life insurance interpleader lawsuits work in federal court, along with access to legal help in all 50 states.
What Is an Interpleader Lawsuit?
An interpleader is a legal procedure that allows a neutral stakeholder, such as a life insurance company, to avoid double liability when more than one person claims the same benefit. Instead of choosing sides, the company deposits the death benefit with the court and names all potential claimants as defendants.
There are two common types of federal interpleader:
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Rule 22 Interpleader under the Federal Rules of Civil Procedure, which requires an independent basis for jurisdiction such as diversity or a federal question.
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Statutory Interpleader under 28 U.S.C. § 1335, which allows jurisdiction with minimal diversity (any two adverse claimants from different states) and an amount in controversy of at least $500.
Both types allow the insurer to seek a discharge from liability once the funds are deposited.
When Are Life Insurance Interpleaders Filed?
Life insurance companies typically file an interpleader when:
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There are conflicting beneficiary designations
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A change of beneficiary is alleged to be invalid due to fraud, duress, or forgery
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The policy is affected by divorce decrees or community property laws
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Family members dispute who should receive the benefit after the insured’s death
These disputes can arise suddenly and may leave claimants confused about their legal rights and obligations.
What Happens After You’re Served?
If you’ve been served with a complaint in an interpleader lawsuit, you are now part of a federal case. This isn’t a typical claim you submit to the insurer, it’s a formal legal proceeding in which you must respond to the court.
Failing to respond can result in a default judgment. If another claimant appears and you don’t, you risk forfeiting the death benefit even if you’re the rightful beneficiary.
You may need to:
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File an answer and crossclaim against other parties
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Raise defenses or challenge documents
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Engage in discovery and possibly testify
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Prepare for summary judgment or trial
Get Help in Your State
While interpleader procedure is federal, the underlying rights often depend on facts and documents governed by state law, such as marriage, divorce, community property, or allegations of undue influence.
If you're facing an interpleader in your state or need to challenge or defend a life insurance claim, you can explore your state-specific options below:
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
Conclusion
Interpleader lawsuits are high-stakes federal cases, often involving complex state-level issues. Whether you're contesting a beneficiary designation or protecting your rights in a multi-claimant dispute, it's important to act quickly and understand the legal process. If you've been named in an interpleader or expect one may be filed you can use the links above to get help tailored to your state.
