[71 NJSuper Page 301] This matter is before the court on a stipulation of facts agreed to by all of the
interested parties and concerns the novel question of whether an insured may effectively, by will, alter the mode of insurance proceeds distribution to his named beneficiaries without substantially complying with the "change of beneficiary" provisions in his policies of life insurance.
The facts are substantially as follows: Julian T. Kelly died on August 8, 1959 as the result of pulmonary tuberculosis. At the time of the decedent's death his life was insured under five individual life insurance policies and one group insurance plan issued by defendant the Equitable Life Assurance Society of the United States (hereinafter Equitable). The beneficiaries under each of the policies in question were the decedent's children, Lucy Merritt Kelly and William Thurber Kelly, age eight and six years respectively.
The five individual life insurance policies provided, with respect to a change of beneficiaries, that:
"The owner may change the beneficiary from time to time prior to the death of the insured, by written notice to the Society, but any such change shall be effective only if it is endorsed on this policy by the Society * * *." (Emphasis added)
The group insurance policy also contained language dealing with a change of beneficiaries by the insured, viz.:
"Upon receipt of due proof of the death of any employee occurring while insured under this policy and while this policy is in force, the Society agrees to pay, at its Home Office in the City of New York, to the person or persons entitled thereto under the provisions of this policy, the amount for which such employee's life is insured.
The beneficiary shall be the person or persons designated on the insurance records described in the provision hereof entitled 'Records and Reports,' in accordance with the employee's election. Any employee may from time to time while insured hereunder change the beneficiary by a written request signed by the employee, but such change shall take effect only upon its entry on such records.
The Society or, upon written agreement between the employer and the Society, the employer shall maintain records setting forth the names of all employees insured and their respective beneficiaries."
On September 15, 1959 plaintiff Edward C. Gunther, as one of the trustees and executors under the will of the decedent, filed proofs of death with Equitable in connection with the decedent's group insurance coverage. Since the group insurance records reflected that the insured's children were the designated beneficiaries at the time of the decedent's death, Equitable advised Gunther that a claim should be made by the children rather than by the executors of the insured's estate.
On September 22, 1959 Equitable, in response to Gunther's inquiry concerning the five individual life insurance policies, informed him that said policies were payable to the insured's ...