What Does Interpleader Mean?
An interpleader is a type of lawsuit involving two or more parties claiming that they are entitled to life insurance benefits. Interpleader lawsuits are typically filed by life insurance companies.
Insuranceopedia Explains Interpleader
Life insurance providers typically file interpleaders in order to resolve complicated situations involving life insurance payouts. When an interpleader case arises, the life insurance company simplifies their involvement by giving the money to the courts and backing out of the situation. The courts take it from there and reach a verdict about the insurance claim.
An interpleader is a win-win for all parties involved, since the insurer will not have to work to resolve the case and the claimant will see the case resolved.