"By Law" designation may miss intended beneficiaries Published Sept. 14, 2007 MCGUIRE AFB, N.J. -- If you have designated your Servicemember's Group Life Insurance benefits to be distributed "By Law," do you know who would receive the insurance proceeds upon your death? Chances are you don't. Most servicemembers understand the value of being able to leave up to $400,000 to their loved ones via their SGLI benefit. Many, however, unknowingly put at risk their intended beneficiaries' ability to collect payment from the policy. By writing "By Law" as the policy's beneficiary, you give up control of the distribution of the proceeds and open the door to claims, disputes and potentially lengthy litigation by third parties claiming to be beneficiaries under the "By Law" distribution scheme. When you use a "By Law" beneficiary designation on your SGLI policy, a court may end up interpreting the distribution of your benefit using definitions from the SGLI statute and state laws. As these laws vary from state to state, the legal definition of terms like "spouse", "child", "parent" and "next of kin" may not be the same as you intend. For instance, the term "parent" generally does not include foster parents or stepparents. An actual case of a member who died on active duty with "By Law" as the beneficiary designation for SGLI illustrates this point. For his entire military career, the member had sent monthly allotments to the foster parents who raised him. Yet on his death, his SGLI proceeds went not to the "parents" he intended but to the drug-addicted natural mother who had abandoned him as a child. Without a specific indication of who you intend to be your beneficiary, no one can confidently predict how a "By Law" designation will be distributed. Don't leave the distribution of this valuable benefit to chance. Take a few minutes to specifically name your intended beneficiaries of your SGLI policy. Review the beneficiaries you have listed regularly - when you PCS, prepare to deploy or whenever circumstances affecting your family arise, such as a birth, death, marriage, divorce or separation. This responsible approach best ensures the proceeds from your SGLI policy are distributed in a timely manner only to those who you wish to receive payment. If you have any questions pertaining to your SGLI benefits, please visit your MPF or a legal assistance attorney.