When the Life Insurance Company Won’t Pay: What to Know About Interpleader Cases
When Carla’s husband passed away, she thought the life insurance policy he had faithfully paid into for 15 years would give her some financial stability. Instead, she got a court notice. Her late husband’s ex-wife had also filed a claim on the same policy, and the insurance company didn’t want to decide who was right.
Rather than paying Carla, they filed something called an interpleader, dumping the problem into the court system and leaving Carla to fight for the benefits she desperately needed.
Carla’s story isn’t unusual. Families across Texas are blindsided by delays, disputes, and legal battles when life insurance companies refuse to pay. Understanding interpleaders is the first step toward protecting your rights.
What Is an Interpleader?
An interpleader is a legal action filed when two or more people claim the same life insurance benefits. Instead of choosing a side, the insurance company deposits the policy funds with the court and asks a judge to decide who is entitled to the money.
For the insurance company, interpleader means safety. They can’t be sued for paying the wrong person. For beneficiaries, it means delay, stress, and often the need to hire a lawyer.
For a detailed explanation, see our FAQ.
Why Insurance Companies File Interpleader
Insurance companies don’t file interpleader to help families, they do it to protect themselves. The most common reasons include:
Conflicting beneficiary designations – For example, an ex-spouse and current spouse both claim benefits.
Last-minute changes – A beneficiary form is updated right before death, raising questions about capacity or undue influence.
Multiple claimants – Children, spouses, or other relatives file competing claims.
Questions of validity – The insurer isn’t sure whether a policy change complies with state law.
Instead of sorting it out, the insurer hands the money to the court and walks away.
How Long Does an Interpleader Case Take?
Unfortunately, interpleader cases can be slow. Some resolve in a matter of months, while others drag on for a year or two. The timeline depends on:
How many claimants are involved,
Whether there are allegations of fraud or undue influence,
How quickly the court’s docket moves, and
Whether anyone appeals the decision.
This means families can be left waiting for benefits they urgently need.
What Beneficiaries Need to Do
If you’re named in an interpleader lawsuit, the court will send you official notice. At this point, you have a limited amount of time to respond. Ignoring the notice can mean losing your right to claim the benefits.
Here’s what typically happens:
You receive notice of the lawsuit.
You file a legal response, asserting your claim to the policy.
The court sets a schedule for hearings and evidence.
A judge decides who is legally entitled to the money.
While this process is straightforward on paper, it is legally technical and full of pitfalls.
Do You Really Need a Lawyer?
Yes. Handling an interpleader “pro se” is fraught with peril. You don’t just have to know the law, you have to follow complex procedural rules.
Courts require strict adherence to deadlines and procedures. If your paperwork isn’t filed correctly, or if you fail to present the right evidence, you may lose your claim. Having a lawyer ensures that:
Your response is filed properly,
Evidence supporting your claim is gathered and submitted,
Invalid beneficiary changes can be challenged, and
You have an advocate presenting your case in court.
Our firm has recovered millions of dollars for clients in interpleader disputes across Texas. We understand both the law and the tactics insurers use.
How We Help Families in Interpleader Cases
At Texas Life Insurance Lawyers, we represent clients across the state. And that includes clients across the world who are involved in interpleader cases in Texas courts. We’ve successfully handled cases with some of the largest insurers in the country, including MetLife, Aetna, Prudential, American General and Mutual of Omaha.
Our approach is focused on:
Fast action – Responding quickly to court deadlines,
Thorough preparation – Building a strong, evidence-backed claim, and
Client advocacy – Fighting to make sure our clients receive the benefits their loved ones intended.
Conclusion
Life insurance is supposed to provide peace of mind—not years of litigation. If you’ve received notice of an interpleader case, don’t face it alone. The right legal help can mean the difference between delay and resolution, between uncertainty and the financial support your family deserves.
Contact Texas Life Insurance Lawyers today for a consultation. We’ll protect your rights, cut through the delays, and fight to secure the benefits your loved one intended for you.