Morrissette v. Provident Life & Accident Insurance

321 A.2d 585, 114 N.H. 409, 1974 N.H. LEXIS 288

• Court: Supreme Court of New Hampshire
• Decided: June 28, 1974
• Docket: No. 6719
• Status: Published

Opinions

Lampron, J.

Action by the beneficiary to recover death benefits under a group life insurance policy issued to her husband while he was employed by Deering-Milliken, Inc. in Exeter. Hearing before a Master (Leonard C. Hardwick, Esq.) resulted in certain findings and rulings and a recommendation of a verdict for the defendant. The master’s report was approved by Morris, J., who entered a verdict accordingly and reserved and transferred plaintiff’s exceptions.

On November 18, 1966, while still employed by Milliken, the insured became totally physically disabled and terminated his employment with the insured group. His policy specifically provided that his insurance “shall terminate ... (c) when active Employment of the employee with the Employer is terminated.” The policy provided, however, that if an employee who is prevented from continuing his employment because of total disability has not attained his sixtieth birthday and submits to the company proof of such’ total disability, the company will endorse his certificate acknowledging the existence of this disability, “but only if such proof be received during the Employee’s lifetime and within one year after termination of active employment.” It is agreed that this required notice was given within the terms of the policy on October 11, 1967, and acknowledged by the company on October 31, 1967. Accordingly the company endorsed his certificate acknowledging the existence at that time of such disability.

The policy further provides, however, that after such endorsement if the insured “submits annually thereafter within three months prior to the anniversary of the original endorsement due proof that total disability has continued without interruption from the termination of his active employment and if death occurs during the continuance of such total disability, the Insurance Company will pay to the beneficiary of record the amount of Employee’s life insurance in force at the time of termination of active employment.” “No payment shall be made ... if death occurs after recovery from total disability or after failure to submit due proof of total disability as above required.”

The master properly found on the evidence that in its letter of October 31, 1967, the company advised the insured that annual proof of the disability was required and that the next proof would be due on July 19, 1968. The company also enclosed forms upon which the proof of such disability could be reported. “Again on July 26, 1968, by letter to the insured, he was advised by the defendant that the annual proof of disability was due.” The master further found that: “Other than the report of October 11, 1967, up until the date of the insured’s death [July 15, 1971] the defendant never received any further communication from either the insured or the plaintiff” who “during her husband’s disability generally managed the affairs of her husband.”

It is well recognized that the company could legally impose compliance with such conditions in order that the policy continue in force instead of terminating when the employee ceased to be employed with the insured group. Sanderson v. New York Life Ins. Co., 194 S.W.2d 221, 225 (Mo. 1946); Garden v. New England Mut. Life Ins. Co., 218 Iowa 1094, 1107, 254 N.W. 287, 293 (1934); see RSA 408:16; Rosenbaum v. New York Life Ins. Co., 47 N.Y.S.2d 255 (App. Div. 1944); 45 C.J.S. Insurance §§ 621 (5), 1064 (1946); 6 G. Couch, Insurance 2d § 32:35 (2d ed. 1961). These conditions are reasonably required to permit the company to review such cases periodically because of actuarial and other considerations which are determinative of the premium to be charged for such policies. J. Maclean, Life Insurance 228 (9th ed. 1962); see Hargrave v. Fidelity Mut. Life Ins. Co., 196 Pa. Super. 627, 630, 175 A.2d 912, 913 (1962).

The conditions under which the policy of plaintiff’s husband was to continue in force were clearly stated in the contract. “[I]t is equally important, to the insured as well as to the insurer, that the provisions of insurance policies which are clearly and definitely set forth in appropriate language and upon which the calculations of the company are based, should be maintained unimpaired by loose and ill-considered interpretations.” Williams v. Union Central Life Ins. Co., 291 U.S. 170, 180 (1933); Sherman v. Metropolitan Life Ins. Co., 297 Mass. 330, 336, 8 N.E.2d 892, 895 (1937); Opten v. Prudential Ins. Co. of America, 194 Minn. 580, 585-86, 261 N.W. 197, 199-200 (1935). There was no evidence of insanity or mental incapacity which would have excused compliance with the terms of the policy. Chagnon v. Insurance Co., 96 N.H. 256, 75 A.2d 167 (1950).

The master properly found and ruled that the “terms of the policy required annual notice of the continued disability as a condition precedent for payment of death benefits”. He further found and ruled that there was a failure to comply with these provisions of the insurance contract and properly recommended a verdict for the defendant which was entered by the trial court.

Judgment on the verdict.

Grimes, J., dissented; the others concurred.