Opinion ID: 1829918
Heading Depth: 2
Heading Rank: 1

Heading: contract clear and unambiguous

Text: In support of their arguments for summary judgment, both Guaranty Bank and Life Insurance argue that the notes clearly indicate that the term of the credit life insurance ran with the term of the note and expired with maturity date of the notes. The notes were never formally extended; and if they were the insurance was not requested. They contend that Mrs. Lowery cannot recover on the policy because the notes show that the insurance had expired and no new coverage was requested. Where the language of an insurance contract is clear and unambiguous it is not construed in favor of the insured but is construed as written. State Farm Mutual Auto Insurance Company v. Gregg, 526 So.2d 554, 556 (Miss. 1988); Ford v. Lamar Life Insurance Co., 513 So.2d 880 (1987). The policy states that individual insurance expires the date the original term of insurance expires. The notes show that Mr. Lowery acquired credit life insurance for a term of 104 days (June 19, 1984 to October 1, 1984) on the $9,000.00 note, and for a term of 244 days (from February 14, 1984 to October 1, 1984) on the $2,000.00 note. The record clearly indicates that the credit life insurance terminated with the maturity date of the notes. However, the policy also provides a grace period benefit. This provision states: Grace Period Benefit: In addition to the death benefit for reducing life insurance as provided in the Death Benefit Provision, the Company will pay an additional benefit to the Creditor Beneficiary of an amount, if any, that the unpaid balance of the loan at the date of death exceeds the death benefit, except that the amount of such additional benefit shall not exceed two (2) times the uniform monthly decrease as defined in the Death Benefit Provision. No Grace Period Benefit will be paid if death occurs sixty (60) or more days after the expiration of the term of insurance. On Level Life Insurance, the Company will pay the death benefit if the Insured Debtor should die within seven (7) days after the expiration of the term of the insurance and the insured loan is unpaid and outstanding as of the date of death. This provision allows that where the credit life insurance death benefit is reducing life, the grace period for reducing life insurance is 60 days. If the death occurs within 60 days of the expiration of the insurance, the death benefit will still be paid. The grace period for level life is seven (7) days, i.e., the death benefit is paid if the insured debtor dies within seven (7) days of the expiration of the term of the insurance. Assuming that Mr. Lowery owned the reducing life form of credit life insurance, then he had 60 days of additional coverage from the expiration of the insurance. Mr. Lowery's death occurred well within that 60 day period and the insurance would pay both notes. However, if he had level life, the insurance would not cover the notes. Mr. Lowery would have only had a seven day grace period and his death was beyond that period for both notes. The terms of the insurance coverage are clearly indicated on the face of the notes and, looking only at those, it is clear that credit life insurance on the notes had expired. But the insurance policy also allows for a grace period. There is no indication from the notes whether the credit life insurance on the Lowery notes was reducing life or level life, so there is no indication as to which grace period applies to Mr. Lowery's death. Treating the insurance as reducing life places the Lowerys within the 60 day grace period. Treating it as level life excludes the Lowerys. Ambiguities in an insurance contract are resolved in favor of the insured. This Court has in the past held that credit life insurance such as that taken out by the Lowerys may be reducing life insurance and the grace period applied. See, Gulf Guaranty Life Insurance Co. v. Thompson, 363 So.2d 297 (Miss. 1978). There is a material issue of whether the Lowerys fit within one of the grace periods, and whether coverage by Life Insurance is available to the Lowerys even after the insurance expired.