This is a summary proceeding to determine the liability of State Mutual Life Assurance Company of America to pay the proceeds on a life insurance policy when the beneficiary of the policy has killed the insured. The company contends that it should be relieved from all liability.
In March 1970 List insured the lives of each of his three children in the amount of $5,000. This insurance was included in a "Supplementary Agreement for Children's Insurance" made part of a substantial policy on the life of List. The basic policy has now lapsed due to nonpayment of premium, but it was in force at the time the children were killed. The beneficiary provision relative to the insurance on the children reads as follows: "[T]he Beneficiary under this Agreement shall be the Insured under this policy if the Insured is living at the death of such Insured Child, or if not, the estate of such Insured." However, the policy defined "Insured" as "the same person as the Insured under this policy," i.e. , List. Only he had the right to change the beneficiary. He owned and paid the premiums on the policy. Hence, no one other than List had an interest in the policy.
The bodies of the three children together with those of List's wife and mother, were found on December 7, 1971. All were shot. On December 9 his car was found at the John F. Kennedy Airport with a parking ticket dated November 10, 1971. For the purposes of this action, counsel have stipulated that he murdered his children and that his whereabouts is unknown.
No New Jersey case has squarely faced the issue raised by the company here.*fn1
A number of reported cases have analyzed the question of which person would be entitled to the benefits of a life insurance policy where the beneficiary of that policy has murdered the insured. Merrity v. Prudential Ins. Co. of America , 110 N.J.L. 414 (E. & A. 1933); DeSena v. Prudential Ins. Co. of America , 117 N.J. Super. 235 (App.Div. 1971); Jackson v. Prudential Ins. Co. of America , 106 N.J. Super. 61 (Law Div. 1969); Turner v. Prudential Ins. Co. of America , 60 N.J. Super. 175 (Ch.Div. 1960). In DeSena, Jackson and Turner the life insurers did not raise the defense urged by the company in this case. They conceded liability under their policies by seeking to interplead the proceeds. Similarly, although Merrity dealt with a policy insuring the joint lives of a husband and wife, the insurer in that case also conceded that if the policy insured a single individual, the proceeds would be due and owing on that policy.
In the reported New Jersey cases the issue was not the liability of the company to pay, but to whom should it pay.
In each of the New Jersey cases some person other than the murderer had some interest in the policy such as: ownership, payment of premiums, right to change beneficiary or as contingent beneficiary. None of these elements is present here.
Some authorities have considered this problem. The Restatement takes the position that the company is relieved from all liability.
3. Beneficiary alone interested. Where no one except the beneficiary or one claiming through him has any interest in the policy, and the beneficiary murders the insured, the insurer is under no liability on the policy. If the policy is taken out by the beneficiary, and the beneficiary at the time when he takes out the policy does not intend to murder the insured, but he later murders the insured, the insurer is under no liability upon the policy. In such a case it is against public policy to permit the beneficiary to profit by the murder, but there is no reason why the estate of the insured should be entitled to the proceeds. The question whether the insurer is liable for the ...