Opinion ID: 1625822
Heading Depth: 1
Heading Rank: 5

Heading: right to change beneficiary

Text: Neb.Rev.Stat. § 44-370 (Reissue 1988) provides: A life insurance company may provide that the amount to become due under a policy shall be paid in installments to a beneficiary therein named.... Any person holding a policy in any such company may, without the consent of the beneficiary, unless the appointment of such beneficiary be irrevocable, either sell and surrender the same to the company, or pledge or assign the same as security for a debt ... or, with the consent of the company, he may change his beneficiary unless the appointment of such beneficiary be irrevocable. (Emphasis supplied.) The task at this point is to determine what is meant by the statutory phrase person holding a policy. As a question of statutory interpretation, the matter is one of law in connection with which we, as an appellate court, have an obligation to reach an independent, correct conclusion irrespective of the determination made by the trial court. State v. Saulsbury, 243 Neb. 227, 498 N.W.2d 338 (1993); Curry v. State ex rel. Stenberg, 242 Neb. 695, 496 N.W.2d 512 (1993); Northern Bank v. Federal Dep. Ins. Corp., 242 Neb. 591, 496 N.W.2d 459 (1993). The party who enters into the contract of insurance or assurance with the insurer or assurer is called the insured or assured. There is some authority that the person contracting with the insurer is the insured while the beneficiary of the policy is the assured. This distinction is not recognized in modern insurance law under which the terms insured and assured are regarded as synonymous except when the particular wording of the policy requires the making of such a distinction. The insured in a life insurance policy means the person whose life is insured and whose death matures the obligation of the insurer to pay. 2A George J. Couch, Cyclopedia of Insurance Law § 23:1 at 769-70 (2d ed. 1984). The Kansas Supreme Court, after citing from a part of the above-quoted section in Couch's treatise, wrote: The policies, read in their entirety, use the term insured to refer to both the one whose life is insured and the owner of the policy. The term is thus ambiguous where these entities are two different people. We hold [the deceased wife] purchased the policies of insurance on the life of her [deceased] husband ... for the specific purpose of preventing the proceeds of the policies from becoming a part of [his] estate. We therefore hold the [deceased wife's estate] is entitled to the proceeds from the policies of insurance on [the deceased husband's] life. (Emphasis in original.) Lightner v. Centennial Life Ins. Co., 242 Kan. 29, 36-37, 744 P.2d 840, 845 (1987). We thus determine that as used in § 44-370, the phrase person holding a policy describes the owner of the policy and that § 44-370 therefore grants the owner of a life insurance policy the right to change the beneficiary unless the appointment of the beneficiary was made irrevocable. It is also clear that the owner need not be the insured, that is, the person whose death obligates the insurer to pay under the policy.