Information on Using a State Owned and Issued Insurance Policy

Information on Using a State Owned and Issued Insurance Policy

Q. How can a funeral home get paid using a New Jersey Department of the Treasury, Division of Pensions and Benefits State Owned and Issued Insurance Policy?

A. State employees or their legal representatives are not allowed to assign the proceeds of a state owned/issued life insurance policy for the purpose of paying for the state employee’s funeral and disposition.

For the purposes of this communication, a state employee is referred to as a “member.” A member is either an active employee or a retiree. A member may be represented by a power of attorney or guardian; however, POA/guardianship paperwork must be sent to the NJDPB for the division to communicate with that representative of the member.

Although New Jersey Administrative Code allows a member to nominate someone to function as their power of attorney, or guardian, the power of attorney/guardianship document must specifically grant that person the right to change or update beneficiary information. Further, the document must specifically state that they may name themselves as beneficiary if applicable.

Because of the complexities of administering a program that includes tens of thousands of state, county and local members, as well as multiple statutory hurdles crafted for each specific system, the state cannot allow its issuing insurance company to honor an assignment of proceeds against a state issued/owned insurance policy to assist in paying funeral costs.

Each New Jersey state administered policy has separate laws governing the benefits, and only the last-named beneficiary or beneficiaries on file can receive the death benefit.

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Ask the Manager

The NJSFDA Manager of the Day program provides members with a resource for addressing and resolving problems that arise in the daily operations of their funeral homes. Here are some matters that were brought to the attention of the Manager of the Day in recent months.

Information on Using a State Owned and Issued Insurance Policy

How can a funeral home get paid using a New Jersey Department of the Treasury, Division of Pensions and Benefits State Owned and Issued Insurance Policy?

Read the answer

Right to Control and Incarcerated Next of Kin

I have a case where the decedent is survived by two adult children, but one of them is serving a life sentence in prison. Does he still share right to control? Or can I bypass him and deal just with his sister?

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Can a Non-Resident Veteran Be Interred at Arneytown?

We are handling arrangements for a decedent who was a veteran but not a resident of New Jersey. Is he able to be buried in the Brigadier General William C. Doyle cemetery in Arneytown?

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