Court Opinion

ID: 9541468
Source: CourtListenerOpinion
Date Created: 2023-08-07 16:25:46.373335+00
Date Added: 2024-06-11T15:02:56.319413
License: Public Domain

ROBERTS, Justice,
dissenting.
I dissent. This is a case of a routine refusal to pay a claim because of nonpayment of premium. The majority’s solu*649tion, however, is far from routine. Rather, the majority holds that a person who has failed to pay an insurance premium either upon its due date or within the subsequent grace period may nonetheless recover for an accident sustained during that grace period. It does so on the novel theory that the beneficiary may “pay” the required premium over six years later through a deduction from the proceeds of the insurance policy.
By permitting appellant to “pay” for the last month of her husband’s coverage over six years after the payment was due, the majority totally disregards the plain language of the insurance policy. Article IV, Section 4 of the policy provides:
“Grace Period. A grace period of thirty-one days following the due date shall be allowed the policyholder for the payment of each premium.”
There is no question that appellant’s husband met with his fatal accident during the grace period allowed by Aetna for the payment of the September, 1975, premium, a premium which appellant’s husband was required to pay. Thus, if appellant’s husband had paid the September premium at any time before his death on September 20 — or if appellant had paid the premium on her husband’s behalf at any time through October 2, 1975, the date of expiration of the grace period — appellant would be entitled to recover under the policy. But the record is clear that, although notice was sent to appellant’s husband that the September premium would be his responsibility, no payment from appellant’s husband or appellant was ever received by either Fisher or Aetna.
As the majority recognizes, a grace period does not provide a period of free insurance. Under a grace period, the policy remains in effect after a policyholder has missed a payment, but payment of the premium within the time “allowed . . . for the payment” is a condition subsequent to the policy’s effectiveness for that period. See Brams v. New York Life Ins. Co., 299 Pa. 11, 148 A. 855 (1930). If, as here, payment is not made within the grace period, the condition *650fails, and coverage is terminated as of the end of the last period for which the premium has been paid (here, August 31).
Because payment for coverage of appellant’s husband was not forthcoming within the time allowed by the grace period, coverage was properly denied, and the order of the Superior Court should be affirmed.
O’BRIEN, C. J., and WILKINSON, J., join in this dissenting opinion.