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My friends father worked as a furniture store in new Jersey

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My friends father worked as a furniture store in new Jersey as a salesman. He was not a partner and had no ownership. My firend was contacted and informed of a small life insurance policy to contact the Life Insurance Co. When she did, she was originally told that the store owner had submitted a letter srtating his entitlement. We submitted her Heirship forms as she is the only living daughter. The Company sent her and Mr. Finkelstein a letter stating that the policy cannot be written to an Individual. This tells me the beneficialry was the former Furniture Business that is no longer in business. My questions is, that If there is no longer a business entity, how does the Life Insurance Co handle the payout? Does it go to the only living heir? Does it get turned over to the state and she needs to file forms with the state of New Jersey? What action does she need to take right now? Does the former furniture storeowner have any legal right to the Life insurance? Is there any case law you can cite that will help our case?
Submitted: 1 year ago.
Category: Legal
Expert:  Law Pro replied 1 year ago.
Life insurance is a contract - it's policy benefits have nothing to do with the decedent's heirs or beneficiaries UNLESS the policy was made payable to such OR to the estate.

New Jersey Statutes - Title 17B Insurance - 17B:17-3 Life insurance defined

17B:17-3. Life insurance defined

"Life insurance" is a policy or contract whereby an insurer is obligated to pay or allow a benefit of pecuniary value with respect to the cessation of human life. Life insurance includes also the granting of endowment benefits and optional modes of settlement of proceeds of life insurance as well as provisions for
a. additional benefits in event of death by accident or accidental means or in event of dismemberment or loss of sight, or
b. safeguarding such insurance against lapse or giving a special surrender value or special benefit or an annuity in the event that the insured shall become totally and permanently disabled, whether such provisions are incorporated in a policy or contract of life insurance or in a policy or contract supplemental thereto.

Life insurance does not include workmen's compensation coverages.

L.1971, c. 144, s. 17B:17-3.


So whomever was the beneficiary of the life insurance policy has claim to the policy benefits.


So then it would be a matter as to if that was part of his company benefits - that he or his heirs or estate are the beneficiaries of the life insurance policy pursuant to his company benefits policy.

Presumptively the former Furniture Business (the old owners thereof) has a claim to the life insurance policy benefits pursuant to the life insurance contract.

She would have to prove that the life insurance were part of his company benefits and his heirs or beneficiaries entitled to such for her to be able to make claim upon the policy.

So she will have to go through his paperwork to see if it was part of his benefits package.

Life insurance is purchased in many instances by business to insurance against the risk of loss of a "key person" within their company.

Key person insurance, also commonly called keyman insurance and key man insurance, is an important form of business insurance. In general, it can be described as an insurance policy taken out by a business to compensate that business for financial losses that would arise from the death or extended incapacity of an important member of the business. To put it simply, Keyman Insurance is a standard life insurance for businesses. A key person can be anyone directly associated with the business whose loss can cause financial strain to the business. For example, the person could be a director of the company, a partner, a key sales person, key project manager, or someone with specific skills or knowledge which is especially valuable to the company. [Wikipedia]

So the life insurance may not be even a part of his company benefits but something purchased by the company in case, for some reason, he could no longer work for them.




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