Klepper v. Standard Life Insurance of Indiana

Opinion

BROWN (G. A.), P. J.

This is an action by the co-executors of the estate of W. A. Klepper, deceased, to recover the proceeds of a credit life insurance policy issued by Standard Life Insurance Company of Indiana on the life of the decedent. On the basis of the express provisions of the policy and pursuant to statutory directive, we have concluded that the trial court was correct in denying recovery.

The facts are stipulated and in substance show that on January 3, 1973, the decedent, W. A. Klepper, made an application to the National Bank of Agriculture for a revolving line of credit of $15,000 to finance accounts receivable in his farm supply business.. The application was approved and a maximum line of credit of $15,000 was established, to expire November 1, 1973. In connection with the transaction, the decedent executed a promissory note, security agreement, disclosure statement, and a schedule of assigned accounts receivable.

[472]

The bank had authority to provide credit life insurance to its customers up to a maximum of $10,000 pursuant to a master group credit life policy issued by respondent Standard Life Insurance Company of Indiana. Upon application, deceased was issued a level term policy by the bank with a face amount of $10,000, payable to the National Bank of Agriculture,

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as primary beneficiary, designated an “irrevocable Creditor Beneficiary,” and the estate of W. A. Klepper as second beneficiary. A premium of $63.30 was paid to the insurance company by decedent.

W. A. Klepper died on March 23, 1973. Prior to his death he never requested or received any funds under the credit agreement.

The unique features and purpose of credit life insurance are recognized in the statutory provisions governing that type of insurance (see Ins. Code, §§ 779.1-779.26)

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and the regulations of the Insurance Commissioner of the State of California (Cal. Admin. Code, tit. 10, §§ 2248.1 -2248.25),

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