Not legal advice. This page summarizes Nebraska Revised Statutes from the Nebraska Legislature's official site and one Nebraska Supreme Court opinion. It does not cover Nebraska regulations or later cases.
Three things to know in Nebraska
- Interest depends on a lump-sum election. The interest statute applies when the beneficiary elects a lump sum in writing and payment is more than 30 days late (Neb. Rev. Stat. 44-3,143).
- Fees follow the judgment. A beneficiary who wins a judgment on the policy gets a reasonable attorney fee; the statute does not require a showing of bad faith (44-359).
- The tort has a standing limit. Braesch allows a first-party bad-faith claim only by a policyholder who is also a covered person or a beneficiary.
Interest on late proceeds: 44-3,143
A company authorized in Nebraska owes interest on life insurance proceeds when all four conditions are met:
- the insured was a Nebraska resident on the date of death;
- the death occurred on or after June 6, 1991;
- the beneficiary elects in writing to receive a lump sum; and
- the proceeds are not paid within 30 days after the company receives proof of death.
Interest runs from the date proof of death was received until payment. The rate is the judgment rate under section 45-103 that was in effect on January 1 of the year the proof arrived; for judgments entered since July 20, 2002, 45-103 sets that rate at two percentage points above the 26-week Treasury bill yield. A properly addressed, postage-paid envelope’s postmark date counts as the payment date. If the beneficiary sues and is awarded interest under 45-103 to 45-103.04 for the same period, 44-3,143 interest is not owed on top of it. Failing to pay this interest is itself listed as an unfair claims settlement practice (44-3,143(4); 44-1540(18)).
Attorney fees on any policy judgment: 44-359
When a beneficiary or other person entitled to proceeds sues on an insurance policy (or a fraternal benefit certificate) and the court enters judgment against the company, the court shall allow a reasonable attorney fee in addition to the recovery, taxed as costs, and the appellate court does the same on appeal. The one exception: no fee if the plaintiff fails to recover more than the company offered under Nebraska’s offer-of-judgment statute, section 25-901. Unlike fee statutes that require an unreasonable or vexatious refusal, 44-359 turns only on obtaining the judgment.
Policy provisions
Section 44-502 lists provisions every individual life policy (other than industrial) must contain, and 44-503 lists provisions it may not contain:
- Grace. One month of grace for premiums after the first year; the company may charge up to 6% a year interest for the days elapsed. If death occurs during grace, overdue and deferred premiums for the current policy year, with interest, may be deducted (44-502(2)).
- Application. Statements by the insured are, absent fraud, representations rather than warranties, and no statement can void the policy unless it is in a written application endorsed on or attached to the policy (44-502(4)).
- Contest period. The policy becomes incontestable after two years in force during the insured’s lifetime, except for unpaid premiums and certain war and non-commercial aviation limitations approved or elected as the statute describes (44-502(5)).
- Suicide. A policy may not exclude or restrict liability for suicide occurring more than two years after the policy date (44-503(2)).
Misrepresentation: “deceived the company to its injury”
Section 44-358 has two sentences:
- Misrepresentations and warranties made in negotiating the policy. None is material or voids the policy “unless such misrepresentation or warranty deceived the company to its injury.”
- Breach of a warranty or condition. It does not avoid the policy unless the breach existed at the time of the loss and contributed to the loss, regardless of contrary policy language.
How Nebraska courts apply “deceived … to its injury” to a specific medical history question is beyond this page.
Unfair claims settlement practices
Under 44-1539, an act listed in 44-1540 is an unfair claims settlement practice when it is committed flagrantly and in conscious disregard of the Act or a regulation, or often enough to show a general business practice. Items that come up on death claims include:
- not attempting in good faith to settle promptly, fairly and equitably once liability is reasonably clear (4);
- compelling insureds or beneficiaries to sue by offering substantially less than they ultimately recover (6);
- refusing to pay without a reasonable investigation (7);
- not affirming or denying within a reasonable time after completing the investigation (8);
- not giving a reasonable and accurate explanation for a denial or compromise offer (13);
- not providing claim forms, with reasonable explanations, within fifteen working days of a request (14);
- not paying interest required by 44-3,143 (18).
The Director of Insurance enforces the Act through charges and a hearing (44-1541).
Braesch: the tort and who may bring it
In Braesch v. Union Insurance Co., 237 Neb. 44, 464 N.W.2d 769 (1991), policyholder parents sued their auto insurer over its refusal to settle an uninsured-motorist claim after their daughter’s death. The Nebraska Supreme Court recognized a tort for bad-faith refusal to settle a first-party claim and adopted this test: the plaintiff must show the absence of a reasonable basis for denying policy benefits and the insurer’s knowledge or reckless disregard of that lack of a reasonable basis. The court called the tort an intentional one.
On standing, the court held that only (1) an injured policyholder who is also a “covered person” or (2) a policyholder who is also a beneficiary may bring the tort claim against the policyholder’s insurer. It reasoned that a nonpolicyholder beneficiary is outside the contract relationship on which the implied covenant rests. Under that holding, a life insurance beneficiary who was not the policyholder may have the contract claim (with 44-359 fees and 44-3,143 interest) but not the tort claim; whether that applies to a particular life policy is a question for a Nebraska lawyer.
Group policies
This page does not summarize Nebraska’s group life conversion statute. Employer-sponsored coverage is often governed by federal ERISA rules; see employer group life.
Five-year limit
Under 25-205(1), an action on a written contract “can only be brought within five years.” Check the policy for its own suit clause and keep the five-year date in view from the first denial.
Killing the insured: 30-2354
Nebraska’s version of the Uniform Probate Code homicide rule provides:
- Who loses. A named beneficiary who feloniously and intentionally kills, or aids and abets the killing of, the insured gets nothing under the policy, which becomes payable as though that beneficiary had died first (30-2354(c)).
- How it is proved. A final conviction of felonious and intentional killing (or aiding and abetting) is conclusive. Without a conviction, the court may decide by a preponderance of the evidence whether the killing was felonious and intentional (30-2354(f)); the statute’s annotations note that an acquittal counts as the absence of a conviction.
- Notice to the insurer. A company paying under the policy’s terms is not liable unless, before payment, it received written notice of a claim under this section at its home office or principal address (30-2354(g)).
Divorce and the beneficiary designation: 30-2333
Nebraska’s 30-2333 leaves no doubt that it reaches life insurance: its definition of “governing instrument” expressly includes an insurance or annuity policy. When a Nebraska marriage is dissolved or annulled, a pre-divorce designation the insured was free to change, naming the ex or the ex’s relatives, is revoked. The policy’s own express terms, a court order or a contract dividing the marital estate can override that result. A decree of separation that does not end the marriage is not a divorce for this section.
An insurer is protected until it receives written notice of the divorce. Under subsection (i)(2), that notice may be mailed to the payor’s main office or home or delivered to it personally; for a payor other than a financial institution, other means that show it knew of the divorce also qualify. For employer plans, ERISA may control (Egelhoff).
A worked example
An Omaha resident dies, and the beneficiary returns the claim form electing a lump sum. The insurer receives proof of death on February 10 and mails the check in an envelope postmarked April 3. Because payment came more than 30 days after February 10, interest is owed from February 10 to April 3 at the 45-103 rate in effect that January 1. If the beneficiary had instead had to sue and won, the court would also have had to award a reasonable attorney fee under 44-359 unless the judgment did not beat a 25-901 offer.
Department of Insurance complaints
The Nebraska Department of Insurance takes consumer complaints: File a Complaint (Nebraska Department of Insurance). Filing does not pause the five-year limit.
Sources
- Nebraska Revised Statutes chapters 25, 30, 44 and 45, Nebraska Legislature: nebraskalegislature.gov.
- Nebraska Department of Insurance, File a Complaint: doi.nebraska.gov.
- Braesch v. Union Insurance Co., 237 Neb. 44, 464 N.W.2d 769 (1991) (full opinion, CourtListener): courtlistener.com. Read November 3, 2026.
- Nebraska Revised Statutes 30-2333 (Nebraska Legislature): nebraskalegislature.gov.
Not legal advice. This page summarizes general rules and the specific statutes cited. Your policy's wording, the state whose law applies, and whether the coverage came through an employer can all change the result. See the disclaimer and editorial policy.