Turner v. Investors Syndicate Life Insurance & Annuity Co.

Opinion

LILLIE, J.

This action involves the construction of language limiting coverage under a life insurance policy. It was submitted for decision on stipulated facts and other documentary evidence. From a judgment in favor of plaintiff-beneficiary defendant appeals.

The background facts are undisputed: On June 4, 1967, the deceased made written application to defendant for a life insurance policy; on the same date he filled out a medical questionnaire, paid a monthly premium of $17.54 and was issued a> conditional receipt (numbered 400733) signed by one Zwissler, a duly authorized agent of defendant. The conditional receipt stated in pertinent part, “The insurance shall be effective as of the date of this receipt or the date of completion of medical examination ordinarily required by Company, whichever is later,” provided the company shall be satisfied (on completion of the examination) that the. applicant is insurable “on said date.” On June 8, 1967, the deceased was given a medical examination by a physician of defendant’s selection; thereafter, on August 15, 1967, he was issued a policy the proceeds of which were payable upon his death to his wife (plaintiff herein). The policy differed in certain respects from that originally applied for—the monthly premium was slightly higher and, as noted in the policy transmittal sent to

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Zwissler, there were these further changes: “Policy rated table D because of medical history. ADB. [Accidental Death Benefits] and WP [Waiver of Premium] denied because of medical history.” Finally, under “Miscellaneous Provisions” it was provided that “In the event of the suicide of the insured, sane or insane, within one year after the date hereof, the amount payable under this policy shall be equal to the premiums paid hereon and no more.” On June 17, 1968, the insured committed suicide—the cause of death was a self-inflicted gunshot wound.

It is contended by defendant that the effective date of the policy was August 15, 1967, when the policy was delivered in its modified form; therefore, since the suicide occurred within one year from such date, under the above-quoted exclusionary clause plaintiff was entitled only to the amount of premiums paid. Plaintiff’s position is that as ordinary lay persons both she and her husband properly presumed that payment of the first monthly premium in advance carried with it immediate commencement of coverage—if not from the date of such payment (June 4, 1967), then at least from the date of the medical examination (four days later); and although defendant may have reserved the rigid to subsequently modify or cancel said policy, defendant failed to meet its obligation of “bring[ing] to the attention of the insured all provisions and conditions which create exceptions or limitations on the coverage.” (