Opinion ID: 1124423
Heading Depth: 1
Heading Rank: 3

Heading: Beneficiary Interest

Text: We described the interest of a beneficiary in a life insurance policy in Hollaway v. Selvidge, 219 Kan. 345, 349, 548 P.2d 835 (1976) (quoting 4 Couch on Insurance 2d § 27:58, pp. 561-64), as follows: `Where a right to change the beneficiary is reserved in the policy, the beneficiary has no vested or indefeasible interest during the lifetime of the insured, but only a revocable expectancy contingent upon being the beneficiary at the time of the insured's death. A beneficiary has only an inchoate right to the proceeds of a policy, subject to being divested at any time during the lifetime of the insured, by transfer, assignment, or change of beneficiary.....' Hollaway is factually distinguishable from this case. In Hollaway, we considered an attempted beneficiary change made after a property settlement agreement and divorce decree were entered. Leo (the insured) had accumulated KPERS benefits and obtained a life insurance and disability/accident policy while married to Rosalyn, who was designated as the beneficiary. As part of their divorce, Leo and Rosalyn reached a settlement agreement dividing their assets and relinquishing all claims against each other. Several months later, Leo married Judy. Within a few weeks Leo was killed. He had attempted to change the beneficiary from Rosalyn to Judy for both his KPERS benefits and the life insurance policy. His employer did not have the right forms on hand to accomplish the change. Despite the lack of beneficiary change, we affirmed the district court's determination that Judy, the second wife, as administrator of Leo's estate, was entitled to the KPERS benefits and the insurance proceeds. We think a fair reading of [the settlement agreement] amounts to a relinquishment of [Rosalyn's] inchoate rights or expectancies both to the insurance proceeds and the KPERS benefits and the decedent's estate is therefore entitled to them. 219 Kan. at 350-51. Also, the district court concluded that Leo had done everything that he could to accomplish the beneficiary change. William asserts that he and Arilla had a tacit understanding that they would maintain life insurance on their own lives to protect the other. However, a tacit understanding does not amount to a contract. William, as the initial beneficiary on Arilla's life insurance policies, had no vested interest in the policies. His interest, if any, must arise under our domestic relations law.