Legal Question in Insurance Law in California
life insurance contract
My husband company hasjust closed its doors of buisness without warning. we have a employment contract with the company to sign over his life insurace policy to him after 10 years of service (which he has completed) along with its cash value. but company refuse to sign release form claiming its stil a company assest and are contiplating filing for bankruptcy. Insurace company can not help us because the still remains as legal holders but claim that policy is in dispute and will not allow company to cash it out,what do you suggest I do?
2 Answers from Attorneys
Re: life insurance contract
Sounds like you have a valid cause of action for breach of contract. One question that is important is whether the contract is a written or oral contract. Both can be enforceable, but you get into potential proof problems an oral agreement.
Depending on the amount of money at stake, i.e., cash value of the policy, amount of benefit from the insurance policy, etc., you should probably speak with an attorney to discuss your options.
I would be happy to speak with you and your husband about your situation.
Caleb Donner
805-494-6557
Re: life insurance contract
You should contact an attorney to immediately notify
the insurer that you claim an interest in the policy.
This must be written.
Then the lawyer may be able to negotiate something
with the lawyers for the company. It may be that
this could be considered a form of wages so that
the labor commissioner might get involved. There
are penalties and wages are treated differently
from other debts in a bankruptcy.
This might also be an ERISA plan, where employee
benefits are involved. There may be a claim for
such where attorneys fees could also be recovered.
The key is to make sure the insurer won't allow the
company to cash in the policy, so that is why a
strong demand letter, perhaps with a copy of your
contract giving you "Vested Rights," should be sent
to the insurer. If company cannot get the money, then
they might just give up trying to cheat you since
they already have other problems.