Hutchinson v. National Life Insurance Company
| Decision Date | 30 April 1917 |
| Citation | 195 S.W. 66,196 Mo.App. 510 |
| Parties | MARTHA E. HUTCHINSON, Respondent, v. NATIONAL LIFE INSURANCE COMPANY, Appellant |
| Court | Kansas Court of Appeals |
Appeal from Adair Circuit Court.--Hon. C. D. Stewart, Judge.
Judgment reversed.
Campbell & Ellison and Locke & Locke for appellant.
Higbee & Mills for respondent.
Plaintiff's action is to recover upon a policy of life insurance for $ 5000 issued upon the life of her deceased husband by the Des Moines Life Insurance Company and assumed by defendant in its reinsurance of that company's business. The policy is dated the 2nd day of May, 1907, for a premium of $ 84.75 payable in advance on the 2nd day of May of each year during the term of insurance. The policy provided for thirty days' grace for payment of premiums. The insured died on the 3rd of October, 1914, without having paid the premium due the preceding May, and the defense is based on that default.
Plaintiff concedes the default, but claims the policy remained in force beyond the date of the death by reason of extended insurance based on the "net value" of the policy, under the provisions of section 6946, Revised Statutes, 1909; and she insists that this net value is aided by a dividend of $ 19.12 due deceased; and that the period of extended insurance is added to by the provision for thirty days of grace for the payment of premiums after they become due; and, by the fact that the policy was not delivered until May 22nd, whereby premiums were not due until the 22nd of May each year. That is to say, it is plaintiff's claim that in determining the purchasing power of the "net value" of the policy, the amount of the dividend should be added to it; and that in determining the time from which the period of extended insurance should begin to run, the time of the delivery of the policy and not its date, should be considered; and that the thirty days' grace should be allowed.
The trial court adopted plaintiff's view and rendered judgment for her.
The statute referred to reads as follows: "The net value of the policy, when the premium becomes due, and is not paid shall be computed upon the actuaries' or combined experience table of mortality, with four per cent interest per annum, and after deducting from three-fourths of such net value, any notes given on account of past premium payments on said policy issued to the insured, and any evidence of indebtedness to the company, which notes and indebtedness shall be then cancelled, the balance shall be taken as a net single premium for temporary insurance for the full amount written in the policy."
From May 2nd, the date on the face of the policy, until deceased's death on the 3rd of October (counting by the day) is a period of one hundred and fifty-four days. The statute above quoted is that the net value of the policy at the time the premium becomes due is to be ascertained with four per cent interest, and that three-fourths of such value (after deducting indebtedness) is considered a single premium extending the life of the policy for the same proportion of a year that such three-fourths net value bears to an annual premium. That is to say, if the three-fourths net value at the time of default is $ 50 and the annual premium defaulted is $ 100 the life of the policy would be extended for six months.
It is admitted by defendant that a single net premium on a policy of $ 5000 at deceased's age of forty-six years at his death, was sixteen and ninety-one hundredths cents per day and that the net value of the policy was $ 23.50, and that three-fourths of this would purchase, at the rate of a single net premium, one hundred and thirteen days extended insurance. It is, however, claimed by plaintiff that according to the testimony of witnesses testifying as experts for defendant, based on the character of policy this is, it would purchase one hundred and seventeen days and we will assume this to be correct. But, counting from the date of the policy, that lacks thirty-seven days of reaching to the death of deceased; and counting from the date of delivery of the policy (say May 22nd) and not the date on its face (Halsey v. Ins. Co., 258 Mo. 659, 167 S.W. 951) it would still lack sixteen days. Therefore, in order to save her case, plaintiff must maintain a right to thirty days' of grace after May 22, or that the dividend of $ 19.12 should be counted as a part of the "net value" of the policy. If she can sustain either one of these positions, within the terms of the policy as they are pleaded in the petition, it will carry extended insurance beyond the date of deceased's death, as the dividend is a sum sufficient to purchase insurance far beyond that time.
The provision of the policy as to days of grace is as follows "If any premium be not paid when due, this policy shall be extended and remain in force for thirty days from such date, and if not then paid with the additional payment of ten cents per thousand dollars of insurance, this policy shall be absolutely void, and all premiums paid shall be forfeited to the Company." ...
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