Life Insurance Benefits Denied to Policy Beneficiary

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Tim is a licensed life insurance agent with 23 years of experience helping people protect their families and businesses with term life insurance. He writes and creates stuff for QuickQuote and other insurance and financial websites. You can find him on Twitter.

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UPDATED: Feb 25, 2020

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In December 2004, Laci Peterson of Modesto, California disappeared from her home. Laci’s husband, Scott Peterson, would later be convicted of killing her and her unborn son. The case turned out to be one of the most highly publicized cases in California history.

A panel of three judges in California recently ruled that Laci’s mother is entitled to receive the death benefit proceeds from Laci’s life insurance policy. Scott Peterson was named the primary beneficiary of the policy. However, he lost his rights to receive the death benefits because of his conviction.

Life insurance policies pay the death benefit proceeds according to the beneficiary structure of the policy. There are occasions where the benefits are not paid as directed by the policy. One example is if all beneficiaries precede the primary insured in death, or the primary insured and all beneficiaries die concurrently.

The case of Laci Peterson’s life insurance policy provides an extreme example. If a policy beneficiary is found to be guilty of participating in the death of the primary insured, the insurance company will not pay benefits to the beneficiary. If no other beneficiaries are listed on the policy, the policy proceeds are often paid to the primary insured’s estate or, as in this case, the executor of the estate.

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