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Legal Memorandum: Beneficiary in an Insurance Policy

Issue: Under New Jersey law, does an insured substantially comply with the change of beneficiary requirements of his policy when he takes no action to effect a change because he justifiably believes his beneficiary designation is correct and as he intends?

Area of Law: Insurance Law
Keywords: Insurance policy; Beneficiary requirements or designation; Change
Jurisdiction: New Jersey
Cited Cases: 71 N.J. Super. 300; 471 Pa. 404; 124 N.J. 338; 817 A.2d 1131; 161 N.J. 149; 107 N.J. Super. 570; 150 N.J. Super. 271; 751 A.2d 229; 107 N.J. Super. 414; 317 N.J. Super. 273; 166 N.J. Super. 308; 453 N.W.2d 149; 154 Wis. 2d 258; 20 N.J. Misc. 430; 265 N.J. Super. 128
Cited Statutes: None
Date: 05/01/2004

In New Jersey the designated beneficiary of a life insurance policy generally has a vested interest in the policy proceeds subject to divestment pursuant to the policy terms.  See Strohsahl v. Equitable Life Assurance Soc’y, 71 N.J. Super. 300, 304 (Ch. Div. 1962) TA l "Strohsahl v. Equitable Life Assurance Soc’y, 71 N.J. Super. 300 (Ch. Div. 1962)" s "Strohsahl v. Equitable Life Assurance Soc’y, 71 N.J. Super. 300, 304 (Ch. Div. 1962)" c 1 ; Prudential Ins. Co. v. Mantz, 128 N.J. Eq. 480, 486 (Ch. 1941), aff’d, 130 N.J. Eq. 385 (E. & A. 1941) TA l "Prudential Ins. Co. v. Mantz, 128 N.J. Eq. 480 (Ch. 1941), aff’d, 130 N.J. Eq. 385 (E. & A. 1941)" s "Prudential Ins. Co. v. Mantz, 128 N.J. Eq. 480, 486 (Ch. 1941), aff’d, 130 N.J. Eq. 385 (E. & A. 1941)" c 1 . 

This general rule, however, is subject to three specific exceptions.  First, where the parties have entered into a written separation agreement or a divorce judgment has been entered, the beneficiary designation may be modified to comply with its terms.  Vasconi v. Guardian Life Ins. Co., 124 N.J. 338, 347 (1991) TA l "Vasconi v. Guardian Life Ins. Co., 124 N.J. 338 (1991)" s "Vasconi v. Guardian Life Ins. Co., 124 N.J. 338, 347 (1991)" c 1  (citing  TA l "Novern v. John Hancock Mut. Life Ins. Co., 107 N.J. Super. 570 (Law Div. 1969)" s "Novern v. John […]

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