Opinion ID: 1716621
Heading Depth: 1
Heading Rank: 7

Heading: The Life Insurance Policy

Text: The life insurance policy in question is a term policy with no cash surrender value, furnished to decedent as an incident of his employment under a group plan with Aetna Life Insurance Company. Both the employee and the employer made payments of premiums, the company's records indicating that the decedent paid $.50 per month for each $1,000.00 unit of coverage since 1965. (The records prior to 1965 were unavailable.) In 1965, the coverage amounted to $15,000.00. It was changed in 1970 to $22,500.00. The proceeds were paid to the older son as designated beneficiary. In this lawsuit, the second wife seeks their recovery. It is well-settled in Louisiana that the proceeds of life insurance, if payable to a named beneficiary other than the estate of the insured, are not considered to be a part of the estate of the insured. They do not come into existence during his life, never belong to him, and pass by virtue of the contractual agreement between the insured and the insurer to the named beneficiary. Succession of Rabouin, 201 La. 227, 9 So.2d 529 (1942); Sizeler v. Sizeler, 170 La. 128, 127 So. 388 (1930). Life insurance proceeds are not subject to the Civil Code articles relating to donations inter vivos or mortis causa, nor are they subject to community claims or the laws regarding forced heirship. The second wife of decedent, Goldie Greig, urges this Court to re-examine these rules. She contends that they provide a vehicle whereby a husband can separate life insurance proceeds from his estate, thus circumventing the laws relating to community property and forced heirship. The jurisprudential rule has now been incorporated in our statutory law. See La.R.S. 22:647. It can no longer be changed by court decision, even if we were inclined to do so. As already noted, this insurance policy was acquired before decedent's marriage to his second wife, and thus was part of his separate estate. No restitution is due the community for the premiums paid by decedent. In such a case, a community claim is supportable only when the cash value of the policy has increased during the community's existence, and then only for one-half the extent of the increase in value. The policy before us is a term insurance policy, which never had a cash surrender value. Therefore, no accounting is due the community. Butler v. Butler, La.App., 228 So.2d 339 (1969). The wife's claim to the insurance proceeds is without merit. For the reasons assigned, the judgment of the Court of Appeal is reversed in the concursus proceeding involving the status of the proceeds of the profit-sharing and retirement plans, and it is ordered that the funds on deposit in the registry of the court be delivered to the administratrix of the estate of Thomas W. Montgomery, Jr., to be divided one-half to Goldie Greig, the surviving spouse in community, and one-fourth each to Thomas W. Montgomery III and Monty George Montgomery, subject to such adjustments as are warranted by an accounting to Sybil Chauvin, the wife of the first marriage, and to the forced heirs for the value of the plans which was vested during the first marriage. In the consolidated suit involving the claim of the administratrix for return of the proceeds of the life insurance policy to the estate of the deceased, the judgment of the Court of Appeal is affirmed. SANDERS, C.J., concurs in part and dissents in part and assigns written reasons. MARCUS, J., concurs in part and dissents in part.