Algoe v. Pacific Mutual Life Insurance Co. of California

Citations

• 91 Wash. 324
• 157 P. 993
• 1916 Wash. LEXIS 1064

Syllabus

<p>Insurance — Life Insurance — Lapse—Automatic Extension — Reserve — Application—Loan. Under a policy of life insurance providing that, after it had been in force three full years, should it lapse, the full amount of the policy at date of lapse, after payment of indebtedness, will be extended without request or demand therefor as nonparticipating term insurance, the insured when he could not pay the premiums had a right to rely upon the reserve fund for automatic extension of his insurance for such time as the surplus would buy; and when, at the time of his death, the insurer had in its hands a reserve to the credit of the insured sufficient to repay a loan and purchase the full amount of nonparticipating term insurance upon the life of the insured to that time, such term insurance was in full force.</p> <p>Same — Extension—Condition Precedent — Loan Provisions — Application of Reserve. In such a case, where the insured had obtained a loan, repayment of the loan is not a condition precedent to the right to set off against his loan the reserve value of the policy and have the remainder applied to the purchase of extended insurance, in view of the loan provision of the policy which declared that “any indebtedness . . . shall be first deducted in any settlement of this policy,” which negatives the idea of such condition precedent.</p> <p>Same — Loan—Indebtedness—Reserve. In such a case, the rights being fixed as of the date of the death, there is no indebtedness due from the insured at the date of the lapse where there is a reserve to his credit sufficient to meet it.</p> <p>Same — PomcY—Construction. An ambiguous or complex clause in an insurance policy difficult for a layman to understand is to be construed in favor of the insured.</p> <p>Same — Life Insurance — Forfeiture — Extension — Loan Provision. The insurance company does not have the right to forfeit extended insurance after the death of the insured, under a loan clause providing that, upon any default in pr