Is life insurance part of the inheritance?
It is often the case that the deceased did not specify their heirs in a life insurance contract, but other persons as beneficiaries. In such cases, it is not uncommon for the life insurance policy to have been taken out years or decades ago and the testator no longer remembered the beneficiaries in the insurance contracts. The insurance benefit may then not be included in the estate and the heirs are not entitled to it. Even if the deceased and the beneficiary have not been in contact for many years, life insurance companies adhere to the details of the beneficiary in the insurance contract and pay the insurance benefit to this person rather than to the heirs.
Can the heirs revoke the subscription authorisation?
However, it is possible under certain circumstances to draw the insurance benefit to the estate and secure it for the heirs. According to case law, the heirs can no longer cancel or revoke the entitlement after the death of the policyholder. However, the heirs may be able to revoke the offer to conclude a gift contract before a corresponding gift contract is concluded. The legal assessment behind this is somewhat more complicated and will be explained later.
As a result, the case law of the courts means that there can be a real race against time between the heirs and the beneficiaries. As soon as the insurance benefit has been paid out to the beneficiaries without the gift offer having been effectively revoked beforehand, the heirs generally no longer have a claim against the beneficiaries. If life insurance contracts exist, it should therefore be checked as soon as possible whether persons other than the heirs have been named as beneficiaries. If this is the case, the beneficiaries should be contacted immediately and a corresponding offer to conclude a gift contract should be revoked. The cancellation should be sent to the beneficiaries immediately and the matter should not be discussed with them by telephone or email beforehand, as there is then a risk that the beneficiaries will contact the life insurance company immediately in order to accelerate the payout or conclude the gift agreement.
The legal background is as follows: Case law distinguishes between the coverage relationship and the allocation relationship (value relationship). The cover relationship concerns the relationship between the insurance company and the beneficiary. The allocation relationship concerns the relationship between the beneficiary and the disposing policyholder or their heirs.
While the entitlement cannot be revoked by the heirs after the death of the policyholder and the beneficiary can therefore in principle demand payment of the insurance benefit from the insurance company (cover ratio), it is a completely different question whether the beneficiary is actually entitled to keep the benefit from the insurance company vis-à-vis the heirs of the policyholder.
The beneficiary can only retain the insurance benefit vis-à-vis the heirs if there is a legal basis for this, e.g. if a gift agreement has been concluded. As a rule, no gift agreement has been concluded during the policyholder's lifetime. The gift contract is then usually concluded in such a way that the insurance company presents the beneficiary with an offer to conclude an insurance contract after the policyholder's death. The life insurance company is usually instructed to do this by the policyholder, because if a policyholder informs the insurance company of a beneficiary in the event of death, case law also sees this as an implied instruction to the life insurer to make a gift offer to the beneficiary. An insurer commissioned with messenger services in this respect usually fulfils this mandate by paying out the sum insured to the beneficiary, because this implicitly expresses the deceased's offer of a gift. The beneficiary can implicitly accept this offer by accepting the money (BGH, judgement of 21 May 2008; BGH decision of 10.04.2013 - IV 38/12).
However, according to case law, it is not sufficient for the beneficiary to learn of his or her entitlement in any way. The conclusion of a gift contract requires the transmission of a corresponding offer by the insurance company. The relevant decision of the BGH of 21 May 2008 states: „If the third party becomes aware of the policyholder's entitlement after the death of the policyholder and therefore demands the death benefit from the insurer, a gift offer by the policyholder is not conveyed to him simply by the insurer requesting documents to verify the facts of the case (in this case the sending of the insurance policy and a death certificate).“
If the gift agreement has been validly concluded, the provisions of inheritance law do not apply in this respect (BGH, judgement of 21 May 2008 - IV ZR 238/06, BGH decision of 10.04.2013 - IV 38/12).