Judge allows Ameritas to deposit death benefit while heirs keep fighting

A New Jersey judge will allow Ameritas Life Insurance Corp. to deposit a $1 million death benefit in a court account while three men continue litigation over which one is the rightful beneficiary.

Ameritas filed a motion for interpleader relief, a process in which the holder of an asset claimed by multiple parties initiates a lawsuit to compel those claimants to litigate their claims against each other.

Ameritas filed its motion nearly a year ago in U.S. District Court for the District of New Jersey, and remains ready to pay the death benefits, Judge Karen M. Williams acknowledged in her April 30 decision. Despite months of mediation, Chu Ming Lu, Qi Sheng Zhang and Tony Lu could not reach agreement with the court on the death proceeds of Feng Guan Lu.

Court documents name Chu Ming Lu, Zhang and Tony Lu as Feng Guan Lu’s sons.

A spokesman for Ameritas declined to comment on the case Monday.

Changing beneficiaries

On Feb. 2, 2011, Feng Guan Lu purchased a $1 million universal life policy from Acacia Life Insurance Co., court documents say. Ameritas later assumed all policy obligations after merging with Acacia in 2014.

Guan Lu initially named Chu Ming Lu as the sole beneficiary. About three months later, he changed his policy to list Qi Sheng Zhang as the “primary beneficiary,” court documents say.

Guan Lu died on Jan. 25, 2024. In the ensuing months, Ming Lu and Zhang both claimed the be the beneficiaries of the death proceeds, as did Tony Lu.

Tony Lu is not named as beneficiary on any documents, but “claimed entitlement to the proceeds (either in whole or in part) based on certain verbal promises allegedly made to him by the Insured prior to his death,” the Ameritas interpleader motion reads..

“Confronted with three competing claims, Ameritas declined to release the Policy proceeds to any party absent a resolution of their dispute,” the Ameritas motion states. “Having no interest in the proceeds and seeking to avoid exposure to multiple liabilities, Ameritas encouraged the Defendants to reach a settlement and identify the proper recipient.”

No unanimous decision

Williams gave Ameritas 10 days to deposit the death benefit amount into a court registry. The Ameritas motion also asked the court to discharge it from “any further liability to Defendants in connection with the disputed death benefits.”

Williams agreed to discharge the insurer from any future liability, contingent on the funds being deposited. Ameritas was not fortunate on its request to be reimbursed for attorney’s fees.

“While the Court will deny this portion of Ameritas’s Motion, it does so without prejudice and grants Ameritas leave to renew its application after it properly deposits the funds into the Court’s registry,” Williams wrote.

© Entire contents copyright 2025 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.