Court Opinion

ID: 3890166
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:19:37.029047+00
Date Added: 2024-06-11T07:45:49.087742
License: Public Domain

I add to the well-reasoned opinion of MR. JUSTICE SWIGGART this further comment:
In common with life insurance contracts generally, the one before us recognizes the rights of the insured in what is known as "accumulated reserves," and, expressly providing against forfeiture of such rights upon default in the payment of premiums, gives to the insured his option to enjoy either of three alternative forms of settlement, (1) in cash, (2) in paid-up insurance, and (3) in extended insurance. Many forms of policies provide that, unless a choice is made of (1) cash, or (2) a paid-up policy, the reserves will be applied in extending, or keeping in force, the insurance at the face of the original policy. However, the instant contract, while offering to the insured, for exercise within ninety days, identically the same optional settlements, expressly provides that, if no other option is selected, the policy will be continued in force under the paid-up insurance option.
This would seem to be clear. But the insurer having died within ninety days without expressing his choice, that is, exercising his option, his beneficiary claims the right to do so. This presents the determinative issue. May the beneficiary, after the death of the insured, exercise the option granted to the insured? I think not.
The "Non-Forfeiture provisions" of the contract, as *Page 420 
specifically expressed therein, provide that it is "the insured" who may exercise the option granted; also it is "action on the part of the insured" under the option which is referred to in paragraph 2 of the option clause. And it seems to me that the reason for this limitation of the right to the "insured" is obvious. The element of chance in the situation of the parties, on which the option right is, of course, essentially grounded, expires with the death of the insured. No sensible basis for the exercise of a choice then remains. It could certainly not have been in the contemplation of the parties that this right of choice would remain after the uncertainty of the length of the life of the insured, an inherent element of all life insurance, has been determined by death. Can it be conceived that the contracting parties contemplated that a choice or option was intended to be provided for between the acceptance of either one of two fixed and determined alternative sums, to-wit, here, $182.50, or $833.33? The dissenting view not only disregards the express limitation of the option to the insured, but presents this anomaly: The insurer stands holding out to the beneficiary two sums, of $182.50 and $833.33, respectively, and saying, "You have your option — make your choice."
Query: Could an offer to insure a life for a stated sum, in favor of a stipulated beneficiary, if accepted within ninety days, be effectively accepted by the beneficiary after death of the insured? *Page 421