TOPIC: Court Rules Proceeds of Key Person Life Policy Owed to Business After Employee’s Retirement
CITATION: Continental Assurance Company v. Cole Frago, No. 3:14-CV-01364(VLB) (U.S.D.C. CT Dec. 2, 2015).
SUMMARY: The widow of a former employee of a business entity called Cole Frago brought suit in the Federal District Court of Connecticut, seeking to recover the death proceeds of a life policy originally purchased as key employee coverage.
Cole Frago asserted that it never transferred the key employee coverage to the insured, nor did it have any obligation to do so, and the death proceeds were properly paid to the company. The insured’s widow countered that the parties’ written agreement obligated Cole Frago to offer to sell the policy to the insured at his retirement, and no such offer was ever made.
The court granted summary judgment to Cole Frago, allowing it to keep the policy’s death benefit.
CITATION: Continental Assurance Company v. Cole Frago, No. 3:14-CV-01364(VLB) (U.S.D.C. CT Dec. 2, 2015).
SUMMARY: The widow of a former employee of a business entity called Cole Frago brought suit in the Federal District Court of Connecticut, seeking to recover the death proceeds of a life policy originally purchased as key employee coverage.
Cole Frago asserted that it never transferred the key employee coverage to the insured, nor did it have any obligation to do so, and the death proceeds were properly paid to the company. The insured’s widow countered that the parties’ written agreement obligated Cole Frago to offer to sell the policy to the insured at his retirement, and no such offer was ever made.
The court granted summary judgment to Cole Frago, allowing it to keep the policy’s death benefit.
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