17B:24-6 - Exemption of proceeds--life insurance - New Jersey Statutes

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.