Employment-based life insurance provides crucial financial protection for families in times of loss. In New Jersey, employees often rely on these policies as a safeguard to ensure their loved ones have support after their passing. Beneficiaries of these life insurance policies are typically family members or individuals chosen by the employee. However, understanding the legal protections available to these beneficiaries is essential, as disputes or complications can arise when accessing the benefits of these policies.
Life insurance policies offered through employment are governed by federal and state laws designed to protect the interests of employees and their beneficiaries. In New Jersey, beneficiaries are granted legal protections to ensure they can access their rightful benefits without unnecessary obstacles. Employees typically enroll in these policies as part of their benefits package, paying premiums deducted from their earnings. Upon the employee’s death, the chosen beneficiary is entitled to receive the death benefit outlined in the policy. At, Trief & Olk, we are here to guide you through the legal process and help you navigate the complexities of your case.
Understanding the Rights of Beneficiaries
New Jersey law provides a safety net for beneficiaries to ensure that they receive the benefits intended for them. When an employee names a beneficiary, the employer and insurance company must honor this designation unless specific legal issues arise. Beneficiaries have the right to review the terms of the policy, which include the amount of the death benefit, how it is paid, and any exclusions or limitations. If the beneficiary is unable to access this information, they can seek legal support to address the matter.
Employers are required to communicate clearly with employees about their life insurance policies. This includes providing information about how the beneficiary designation works and ensuring that the employee understands how to update their beneficiary if necessary. Employers also have a responsibility to notify beneficiaries promptly after an employee’s death. These measures are in place to prevent delays and confusion during what is often a difficult time for families.
Challenges Beneficiaries May Face
Despite the legal protections in place, beneficiaries in New Jersey may encounter obstacles when claiming life insurance benefits. One common issue is a dispute over the named beneficiary. Disputes can arise if the deceased employee failed to update their beneficiary designation after major life events, such as divorce or remarriage. In such cases, multiple parties may claim entitlement to the benefits, leading to legal battles that can delay payment.
Another challenge is the denial of a claim due to policy exclusions. Life insurance policies may include exclusions for certain causes of death, such as suicide within a specified period or death resulting from criminal activity. If the insurance company denies a claim based on these exclusions, the beneficiary has the right to challenge the decision and seek clarification or appeal the denial. Legal support can help beneficiaries navigate these challenges and ensure their rights are upheld.
Federal Laws That Protect Beneficiaries
In addition to New Jersey state laws, federal laws also play a critical role in protecting employment-based life insurance beneficiaries. One such law is the Employee Retirement Income Security Act (ERISA), which governs many employment-based benefit plans, including life insurance. ERISA requires employers to provide clear information about life insurance policies and establishes guidelines for resolving disputes.
Under ERISA, beneficiaries have the right to file a claim for benefits and to appeal any denial of their claim. The law also requires employers and insurers to act in good faith when handling claims. If a beneficiary believes their rights under ERISA have been violated, they can file a lawsuit to seek the benefits they are entitled to. ERISA’s protections ensure that beneficiaries have a legal framework to rely on when disputes arise.
We contacted Trief & Olk to help us with a life insurance issue and Shelly Friedland was the attorney assigned to our case. Before Shelly took our case she explained to us that the likelihood of our success without going to court was possible but not likely. Unfortunately we did not get the outcome we had hoped for but it was our decision to not move forward and have our case litigated. Shelly is very knowledgeable and was very straight-forward in her assessment of our case as we moved forward. She was very patient and thorough in answering our questions. She always responded in a timely manner and listened to our concerns. We would certainly recommend Shelly and would use her firm again in the future.” - John Ramig If there is any possibility of winning your life insurance case – this is the place to do it for you. They are efficient, honest and will achieve the best possible outcome. Shelly Friedland worked on my case where a life insurance policy had lapsed and was even a few days beyond the grace period. Farmers had rejected my claim twice and was unwilling to take a second look. Shelly was able to get them to pay the entire claim without going to court, and the full amount was deposited in my account within a couple months. Highest recommendation.” - Kathleen Brown Trief & Olk is a superior law firm. Their attorneys and other legal professionals have a brilliant understanding of the law and the litigation process. They diligently perform their work in an efficient, strategic and cost-effective manner to ensure the best possible outcomes for their clients. - Christopher Hughes
The Importance of Keeping Beneficiary Designations Updated
One of the simplest yet most important steps employees can take is keeping their beneficiary designations updated. Outdated designations can lead to significant legal issues for beneficiaries. For example, if an employee forgets to update their beneficiary after a divorce, the former spouse may still be entitled to the benefits, even if this was not the employee’s intent.
Employees should review their beneficiary designations regularly and make updates after major life events such as marriage, divorce, the birth of a child, or the death of a previously named beneficiary. Employers are typically required to provide a straightforward process for updating beneficiary designations, ensuring employees can make changes as needed. Clear and accurate designations are essential to prevent disputes and ensure the intended beneficiary receives the death benefit.
What Beneficiaries Should Do When Facing Legal Issues
When beneficiaries encounter disputes or denials, it is important to understand their rights and take action promptly. The first step is to gather all relevant documents, including the life insurance policy, the employee’s enrollment paperwork, and any communication with the insurance company. These documents will provide the necessary information to determine the terms of the policy and the reason for the denial or dispute.
If the issue cannot be resolved directly with the employer or insurance company, beneficiaries should seek legal assistance. Attorneys with experience in life insurance claims can provide valuable guidance and represent beneficiaries in disputes. They can help beneficiaries understand the legal options available and ensure that their rights are protected under New Jersey and federal law.
Settlements & Verdicts
At Trief & Olk, we understand the challenges that beneficiaries of employment-based life insurance policies may face. Our team is committed to helping clients navigate these challenges and secure the benefits they are entitled to. Whether you are dealing with a denied claim, a beneficiary dispute, or any other legal issue related to life insurance, we are here to provide the support and guidance you need.
If you are facing difficulties as a beneficiary of an employment-based life insurance policy in New Jersey, Trief & Olk is ready to help. Our attorneys have a strong track record of assisting clients with life insurance disputes and ensuring they receive the benefits they deserve. Contact us today to schedule a consultation and learn how we can assist you.