Million Dollar Insurance Scam

I have discovered from another family member that my Father had a million dollar life insurance policy for his children which my grandmother was made the primary beneficiary until we were of age.
My grandmother did not give the children the money and kept it.

  1. How I can confirm the policy if I have no policy information?
  2. Upon confirmation, how can I pursue this matter?
  3. What is the consequences of the action?
    Thank you for your advice,


  1. Talk to a lawyer.
  2. Talk to a lawyer.
  3. Talk to a lawyer.

A “primary Beneificary” can do what ever they want with the money they receive, can’t they? I think if your father wanted the money to be controlled by your grandmother on your behalf, the standard thing to do would be to have the $$ go into a trust with your grandmother as the trustee.

But IANAL, so you should probably take Exapno’s advice.

The “normal” way to make sure that children who are not yet adults get a cut of the money is to place it in a trust. It might be that your relative is misremembering the situation, and the fact might be that a trust was made and granny was made the trustee. If so, and granny spent it all, you may have a civil and/or possibly a criminal case for embezzlement. Lawyer up, especially if you think you might be entitled to a big chunk.

In terms of research, you could try looking up your father’s will (if it went through probate, it may be public record - call the court clerk of the jursidiction where your father died). That could give you an idea of what to tell the attorney and will likely help in the search for actual documents and whatnot.

You say it was life insurance for his children. But who was the life insurance on? It sounds like you mean a life insurance policy on himself, that named his mother as the beneficiary. If that was the case, the life insurance policy wasn’t for his children.

It’s possible that the beneficiary of the life insurance was a trust that your grandmother was the trustee of. Trusts can have many stipulations, like the beneficiaries of the trust not receiving anything until a certain age, like 30 or 40. It would be how your father set it up, if there was such a trust.

Have you asked your grandmother or requested to see your father’s will, or talked to his attorney?

Get your own attorney.

You may or may not have been scammed. Your father could have been a poor estate planner.

I’ve bolded the part of the OP that puzzles me. Generally speaking, a life insurance policy has a beneficiary to whom to proceeds of the policy go when the policyholder dies. Because one can designate one’s own estate as the beneficiary, I suppose one could similarly designate a trust fund as the beneficiary on the policy. But was that done in this case? Or did your father say to Grandmother one day, “Listen, I listed you as the beneficiary on my life insurance, but when I kick off, you take the proceeds and divide it between my kids when they’re of age, okay?”

In other words, unless the policy itself says something about a trust that divides the proceeds among Father’s children when they are of age, it would seem to me that it’s Grandmother’s money.

But my remarks are necessarily general, so I’ll also echo the others: check with a local lawyer to find out the situation in your jurisdiction.

When my father died, we found life insurance policies that variously named his parents, my mother and us as beneficiaries. It all depended on when he took the policy out – before he was married, before he had children, or after my mother died. He was good at taking out insurance, not so good at updating his beneficiaries.

Life insurance policies go to the named beneficiary, not to the estate. Talk to a lawyer.

Moved from General Questions to IMHO, where you can get all the advice you want.

Get a lawyer.

samclem Moderator

That’s all the advice you need from this (or any) message board. Get a good lawyer in the field, and good luck.

I see this all the time. I have owned an insurance agency for 28 years,

The typical scenario goes like this. Man buys life insurance from one of the less competent agents that litter the world.

The policy is meant to take care of his kids, but the kids are under age. He choses not to use a trust or make his wife the beneficiary, he may not want her new husband to get any money, so he makes his mom the beneficiary. Now she can watch the money while the kids are young and then turn it over to them.

Completely wrong way to do it but it happens all the time.

The key here is it does not matter what the insured’s intentions were, it only matters who was the beneficiary at the time of death,

In the US life insurance is a contract that can bypasses probate, the will or estate have no say in the matter.

He trusted his mom, it seems he was wrong to do so.