State Statutes Affecting Assignments by Beneficiaries

In the absence of restraining statutes, beneficiaries may assign their contingent interest in a life policy, although there are legal cases affirming the position that the holder of a certificate in a fraternal or mutual benefit society may not assign the same, unless the restriction is waived by the society, to persons who do not come within the group of permitted beneficiaries. Unless prohibited by statute, even the wife has been held to have the right to assign her interest in a policy in order to secure a debt of her husband. But, as noted in the preceding chapter, some thirty-five states have adopted laws which have for their purpose the protection of the interest of the wife and children of the insured by providing that the proceeds of his life insurance made payable to them shall not be liable to seizure or appropriation for the satisfaction of the claims of creditors. In New York and Wisconsin the courts have construed such statutes as meaning that the wife is prohibited altogether from assigning her interest ; while in other states Arkansas, Kentucky, Maryland, and Missouri similar statutes were construed as not precluding such an assignment. By subsequent enactment, however, the New York law now provides that "a policy of insurance on the life of any person for the benefit of a married woman, is also assignable and may be surrendered to the company issuing the same, by her, or her legal representative, with the written consent of the assured."