A change of beneficiary (or to a will; or to a power of attorney; etc.) can only be made by someone who is mentally competent; a change made by someone not competent is void, or not valid. While it is not a bright line as to when a person is competent or not--a court will determine this, based on all the facts, the person's condition, etc.--from what you write, it appears that are grounds to challenge the change in beneficiary. In addition, under some circumstances, trying to get an incompetent person to change her life insurance (or will, etc.) for the new beneficiary's benefit could provide grounds for additional civil, or even criminal, liability.  From what you write, it would seem to be worth it for your wife to consult with an attorney about possibly challenging this redesigation and also possibly having a guardian appionted for her grandmother. Good luck.