N.J. Stat. tit. 17B, ch. 24

in effect

N.J. Stat. § 17B:24-1.1 Insurable interests

1. a. For the purpose of life insurance, health insurance or annuities: (1) An individual has an insurable interest in his own life, health and bodily safety. (2) An individual has an insurable interest in the life, health and bodily safety of another individual if he has an expectation of pecuniary advantage through the continued life, health and bodily safety of that individual and consequent loss by reason of his death or disability. (3) An individual has an insurable interest in the life, health and bodily safety of another individual to whom he is closely related by blood or by law and in whom he has a substantial interest engendered by love and affection. An individual liable for the support of a child or former wife or husband may procure a policy of insurance on that child or former wife or husband. (4) A corporation has an insurable interest: (a) in the life or physical or mental ability of any of its directors, officers, or employees, or the directors, officers, or employees of any of its subsidiaries or any other person whose death or physical or mental disability might cause financial loss to the corporation; (b) pursuant to any contractual arrangement with any shareholder concerning the reacquisition of shares owned by him at the time of his death or disability, in the life or physical or mental ability of that shareholder for the purpose of carrying out that contractual arrangement; (c) pursuant to any contract obligating the corporation as part of compensation arrangements, in the life of the individual for whom compensation is to be provided; or (d) pursuant to a contract obligating the corporation as guarantor or surety, in the life of the principal obligor. The trustee of a trust established and fully funded by a corporation providing solely life, health, disability, retirement, or similar benefits to employees of the corporation or its affiliates and acting in a fiduciary capacity with respect to those employees, retired employees, or their dependents or beneficiaries, has an insurable interest in the lives of employees for whom such benefits are to be provided. (5) A nonprofit or charitable entity qualified pursuant to section 501 (c) (3) of the Internal Revenue Code of 1986 (26 U.S.C. s.501(c)(3)), or a government entity has an insurable interest in the life or physical or mental ability of its directors, officers, employees, supporters or their designees or others to whom it may look for counsel, guidance, fundraising or assistance in the execution of its legally established purpose, who either: (a) join with the entity in signing the application for insurance, which application names the entity as the owner and irrevocable beneficiary of the policy; or (b) after having been listed as owner, subsequently transfer ownership of the insurance to the entity and name the entity as the irrevocable beneficiary of the policy. The trustee of a trust established and fully funded by a nonprofit or charitable entity qualified pursuant to section 501 (c) (3) of the Internal Revenue Code of 1986 (26 U.S.C. s.501(c)(3)), or a government entity providing solely life, health, disability, retirement, or similar benefits to employees of the entity or its affiliates and acting in a fiduciary capacity with respect to those employees, retired employees, or their dependents or beneficiaries, has an insurable interest in the lives of employees for whom such benefits are to be provided. b. No person shall procure or cause to be procured any insurance contract upon the life, health or bodily safety of another individual unless the benefits under that contract are payable to the individual insured or his personal representative, or to a person having, at the time when that contract was made, an insurable interest in the individual insured. c. If the beneficiary, assignee, or other payee under any contract made in violation of this section receives from the insurer any benefits thereunder accruing upon the death, disablement, or injury of the individual insured, the individual insured, or his executor or administrator, as the case may be, may maintain an action to recover those benefits from the person so receiving them. d. An insurer shall be entitled to rely upon all statements, declarations and representations made by an applicant for insurance relating to the insurable interest of the applicant in the insured and no insurer shall incur legal liability, except as set forth in the policy, by virtue of any untrue statements, declarations or representations so relied upon in good faith by the insurer. e. This section shall not apply to group life insurance, group health insurance, blanket insurance or group annuities. L.1991,c.369,s.1; amended 1992,c.190.

N.J. Stat. § 17B:24-2 Minors

a. Any minor not less than 15 years of age may, notwithstanding such minority, contract for annuities or for insurance, or affirm by novation or otherwise pre-existing contracts for annuities or insurance, upon his own life, body or health, or upon the life, body or health of another person in whom the minor has an insurable interest. b. Any minor not less than 15 years of age may, notwithstanding such minority, acquire ownership of and exercise every right, privilege and power with respect to or under any contract of annuity or insurance upon the life, body or health of such minor or of another person, whether or not such contract was applied for by such minor. A minor shall be deemed competent to receive and give full acquittance for any payment made by any insurer under the provisions and options of, or under a settlement agreement arising from, any contract of annuity or insurance in which a minor has acquired any interest, or is a beneficiary as follows: (1) As to a minor not less than 15 years of age--a payment or payments in aggregate not exceeding $2,000.00 in any 1 calendar year, or, (2) As to a minor not less than 18 years of age--a payment or payments in aggregate not exceeding $5,000.00 in any 1 calendar year; provided that prior to any such payment to a minor the insurer has not received at its home office written notice of the appointment of a duly qualified guardian of the property of the minor. A minor shall not be deemed competent to alienate the right to or to anticipate or commute such payment. A minor shall not by reason of his minority, be entitled to rescind, avoid or repudiate such a contract or any exercise of a right, privilege or power, or acquittance given, thereunder; except that a minor not otherwise emancipated shall not be bound by any unperformed agreement to pay, by promissory note or otherwise, any premium on any such annuity or insurance contract. c. The provisions of this section shall not be deemed as requiring any insurance company making such payment to determine whether any other insurance company may be effecting a similar payment to the same minor. L.1971, c. 144, s. 17B:24-2.

N.J. Stat. § 17B:24-3 Application as evidence

a. No application for any life or health insurance policy or annuity contract shall be admissible in evidence in any action relative to such policy or contract, unless a copy of the application was attached to or endorsed upon the policy or contract when issued. b. If any life or health insurance policy or annuity contract delivered in this State is reinstated or renewed, and the insured or the beneficiary or assignee of the policy or contract makes written request to the insurer for a copy of the application, if any, for such reinstatement or renewal, the insurer shall, within 30 days after receipt of such request at its home office, deliver or mail to the person making such request a copy of such application reproduced by any legible means. In the case of such a request from a beneficiary or assignee, the time within which the insurer is required to furnish a copy of such application shall not begin to run until after receipt of evidence satisfactory to the insurer of the beneficiary's or assignee's interest in the policy or contract. c. No alteration on any written application for any such policy or contract shall be made by any person other than the applicant without his written consent, except that insertions may be made by the insurer, for administrative purposes only, in such manner as to indicate clearly that such insertions are not to be ascribed to the applicant. d. The falsity of any statement in the application for any policy or contract covered by this section may not bar the right to recovery thereunder unless such false statement materially affected either the acceptance of the risk or the hazard assumed by the insurer. e. This section shall not apply to group life insurance, group health insurance, or blanket insurance policies or to group annuity contracts. L.1971, c. 144, s. 17B:24-3.

N.J. Stat. § 17B:24-4 Assignments

a. Nothing in this Title shall prohibit any person insured under an insurance policy or annuity contract, other than group, from assigning or not assigning, as provided by its terms. Subject to its terms relating to assignability, any life or health insurance policy or annuity contract, other than group, whether heretofore or hereafter issued, under the terms of which the beneficiary may be changed upon the sole request of the insured or owner, if other than the insured, may be assigned either by pledge or transfer of title, by an assignment executed by the insured or such owner alone and delivered to the insurer, whether or not the pledgee or assignee is the insurer. Any such assignment shall entitle the insurer to deal with the assignee as the owner or pledgee of the insurance policy or annuity contract, other than group, in accordance with the terms of the assignment, until the insurer has received at its home office written notice of termination of the assignment or pledge. b. Nothing in this title shall prohibit any person insured under a group insurance contract, pursuant to an arrangement among the insured, the group policyholder and the insurer, from making to any person an assignment of the rights and benefits conferred on him by any provision of such contract or by law including specifically but not by way of limitation the right to have issued to him an individual policy as set forth in section 17B:27-19 and section 17B:27-20, the right to name a beneficiary and the right to receive any proceeds of the policy payable during the lifetime of the insured. Any such assignment, whether made before or after the effective date of this law, shall entitle the insurer to deal with the assignee as the owner of all rights and benefits conferred on the insured under the policy in accordance with the terms of the assignment. L.1971, c. 144, s. 17B:24-4.

N.J. Stat. § 17B:24-5 Payment discharges insurer

Whenever the proceeds of or payments under a life or health insurance policy or annuity contract heretofore or hereafter issued become payable in accordance with the terms of such policy or contract, or the exercise of any right or privilege thereunder, payment thereof by the insurer in accordance therewith or in accordance with any written assignment thereof shall fully discharge the insurer from all claims under the policy or contract. L.1971, c. 144, s. 17B:24-5.

N.J. Stat. § 17B:24-6 Exemption of proceeds--life insurance

a. If a policy of insurance, whether heretofore or hereafter issued, is affected by any person on his own life, or on another life, in favor of a person other than himself, or, except in cases of transfer with intent to defraud creditors, if a policy of life insurance is assigned or in any way made payable to any such person, then the lawful beneficiary, assignee or payee of such policy, shall be entitled to its proceeds and avails against the creditors and representatives of the insured and of the person effecting the same, whether or not the right to change the beneficiary is reserved or permitted, or the policy is made payable to the person whose life is insured or to the executors or administrators of such person if the beneficiary shall predecease such person. Except however the foregoing shall not be applicable if the lawful beneficiary, assignee or payee of such policy is any of the following: (1) The insured, (2) The person so effecting such insurance, or (3) The executors or administrators of such insured or the person so effecting such insurance. b. Such proceeds and avails shall be exempt from any liability for any debt of the beneficiary existing at the time the proceeds and avails become available for his use; provided that, subject to the statute of limitations, the amount of any premiums for such insurance paid with intent to defraud creditors, with interest thereon, shall inure to their benefit from the proceeds of the policy; but the insurer issuing the policy shall be discharged of all liability thereon by payment of its proceeds in accordance with its terms, unless, before such payment, the insurer shall have received written notice at its home office, by or in behalf of a creditor, of a claim to recover for transfer made or premiums paid with intent to defraud creditors setting forth such facts as will enable the insurer to ascertain the particular policy. c. For the purposes of subsections a. and b. above, a policy shall also be deemed to be payable to a person other than the insured if and to the extent that a facility-of-payment clause or similar clause in the policy permits the insurer to discharge its obligation after the death of the individual insured by paying the death benefits to a person as permitted by such clause. L.1971, c. 144, s. 17B:24-6.

N.J. Stat. § 17B:24-7 Exemption of proceeds--annuity contracts

a. The benefits, rights, privileges, powers and options which under any annuity contract heretofore or hereafter issued are due or prospectively due the annuitant, shall not be subject to execution, garnishment, attachment, sequestration or other legal process nor shall the annuitant be compelled to exercise any such rights, privileges, powers, or options, nor shall creditors be allowed to interfere with or terminate the contract, except: (1) As to amounts paid, with intent to defraud creditors, for or as consideration for any such annuity, with interest thereon, and of which the creditor has given the insurer written notice at its home office prior to the making of the payments to the annuitant out of which the creditor seeks to recover. Any such notice shall set forth such facts as will enable the insurer to ascertain the particular annuity contract. (2) The total exemption of benefits presently due and payable to any annuitant periodically or at stated times under all annuity contracts under which he is an annuitant, shall not at any time exceed $500.00 per month for the length of time represented by such installments, and such periodic payments in excess of $500.00 per month shall be subject to garnishee execution to the same extent as are wages and salaries. (3) If the total benefits presently due and payable to any annuitant under all annuity contracts under which he is an annuitant, shall at any time exceed payment at the rate of $500.00 per month, then the court may order such annuitant to pay to a judgment creditor or apply on the judgment, in installments, such portion of such excess benefits as to the court may appear just and proper, after due regard for the reasonable requirements of the judgment debtor and his family, if dependent upon him as well as any prior court orders. b. If the contract so provides, the benefits, rights, privileges, powers or options accruing under such contract to a beneficiary or assignee shall not be transferable nor subject to commutation, and if the benefits are payable periodically or at stated times, the same exemptions and exceptions contained herein for the annuitant, shall apply with respect to such beneficiary or assignee. L.1971, c. 144, s. 17B:24-7.

N.J. Stat. § 17B:24-8 Exemption of proceeds--health insurance and disability provisions

Except as may otherwise be expressly provided by the policy or contract, the proceeds or avails of all policies of health insurance and of provisions providing benefits on account of the insured's dismemberment, loss of sight or disability which are supplemental to life insurance policies or annuity contracts, heretofore or hereafter effected, shall be exempt from all liability for any debt of the insured, and from any debt of the beneficiary existing at the time the proceeds are made available for his use. Nothing herein contained shall apply to any income disability benefit in any action to recover for necessaries contracted for after the commencement of the disability covered by the disability clause or contract allowing such income benefit. L.1971, c. 144, s. 17B:24-8.

N.J. Stat. § 17B:24-9 Exemption of proceeds--group insurance

a. A policy of group life insurance or group health insurance or the proceeds thereof payable to the individual insured or to the beneficiary thereunder, shall not be liable, either before or after payment, to be applied by any legal or equitable process to pay any debt or liability of such insured individual or his beneficiary or of any other person having a right under the policy. The proceeds thereof, when not made payable to a named beneficiary or to a third person pursuant to a facility-of-payment clause, shall not constitute a part of the estate of the individual insured for the payment of his debts. Nothing herein contained shall apply to any income disability benefit in any action to recover for necessaries contracted for after the commencement of the disability covered by the disability clause or contract allowing such income benefit. b. This section shall not apply to group insurance covering the debtors of a creditor, to the extent that such proceeds are applied to payment of the obligation for the purpose of which the insurance was so issued. L.1971, c. 144, s. 17B:24-9.

N.J. Stat. § 17B:24-10 Policy settlements

Any life insurer shall have the power to hold under agreement the proceeds of any policy issued by it, upon such terms and restrictions as to revocation by the policyholder and control by beneficiaries, and with such exemptions from the claims of creditors of beneficiaries other than the policyholder as set forth in the policy or as agreed to in writing by the insurer and the policyholder. Upon maturity of a policy, in the event the policyholder has made no such agreement, the insurer shall have the power to hold the proceeds of the policy under an agreement with the beneficiaries. The insurer shall not be required to segregate the funds so held but may hold them as part of its general assets. L.1971, c. 144, s. 17B:24-10.

N.J. Stat. § 17B:24-11 Participating and nonparticipating policies--right to issue; payment of commissions thereon

A stock or mutual life insurer may issue policies on both the participating and nonparticipating basis, provided that the right or absence of right of participation is reasonably related to the premium charged and that the policy indicates clearly whether it is participating or nonparticipating. No life insurance company doing business in this State, and issuing policies both on participating and nonparticipating bases, shall pay commissions at a higher rate with respect to participating policies than it pays with respect to comparable nonparticipating policies. L.1971, c. 144, s. 17B:24-11.

N.J. Stat. § 17B:24-12 Separate risks and premiums

When a policy shall insure against more than one hazard or peril, the insurance against any specific hazard or peril shall not be separately cancelable unless the policy shall specify a separate premium for any such insurance so cancelable. No policy of life insurance or annuity contract as the same are defined in 17B:17-3 and 17B:17-5 shall cover any other hazard or peril than insurance against bodily injury or death by accident, and upon the health of persons as the same is defined in section 17B:17-4. L.1971, c. 144, s. 17B:24-12.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://www.njleg.state.nj.us/legislative-activity/statutesFetched: 10/17/2026