Opinion ID: 1103328
Heading Depth: 2
Heading Rank: 2

Heading: Donald Cline

Text: Cline has a degree from a technical college; he is a production controller at an army depot. On December 29, 1983, Cline purchased a Whole Life 110 policy with a face value of $50,000 from Alfa agent John Scott. Scott and Cline previously knew each other because Scott was Cline's high school football coach. Cline testified that Scott told him that he could pay the premiums on the policy for four years and that then the dividends will pay the premiums on the policy. Cline later testified that he could not remember whether Scott told him that dividends or interest would pay the premiums. Cline's application for the insurance was marked to indicate that he chose the minimum-deposit payment option; however, Cline did not ask when he purchased the policy what choosing that option meant. Cline's application was also marked to indicate that he chose the automatic premium loan option. Cline testified that he thought Scott had showed him some documents, possibly an illustration and a copy of the policy. However, Cline also testified that he did not rely upon any of the documents when he purchased the policy. Scott testified that he understood from his training at Alfa that at a certain point loans on the policy amounts would pay the premiums on the Whole Life 110 policies, and he testified that he explained to Cline that Cline would pay the premiums out-of-pocket for four years and that a loan on the policy would pay the premiums thereafter. After paying his premiums out-of-pocket for four years, Cline telephoned Scott to inquire whether his premiums would begin to be paid out of the cash value of his policy. Scott told Cline that he would have to pay the premiums for six years, not four. Scott testified that two years later he showed Cline an illustration explaining the minimum-deposit payment plan, and at Cline's request his policy was placed on the minimum-deposit payment plan. Alfa sent notices to Cline stating that his annual premium had been paid by a policy loan; however, Cline testified that he was not sure whether he received all notices each year. Cline did acknowledge that he received annual statements reflecting that his premium was due. Cline said that when he received those statements, he would telephone Scott, who would then tell Cline that he did not need to pay the premiums because they were being paid by loans. Cline's policy is still in force, and it now has a death benefit in excess of $64,885.