Furtado v. Metropolitan Life Insurance Company, Inc.

60 Cal.App.3d 17 (1976)

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Nature of the Case

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Facts

On February 12, 1973, D issued a policy of life insurance with a face value of $15,000 to and on the life of P's son Vincent E. Furtado, then 18 years of age. P was designated as beneficiary. Premium payments of $26.45 each were to be paid on or before the 12th day of each month commencing February 12, 1973. A total of six monthly premiums were paid, the last payment being that of July 12, 1973. The payment due August 12, 1973, was not paid. P's son died on October 26, 1973, 75 days after August 12, 1973, the due date of the August premium. P claimed that the insurance policy was still in effect on the date of death. On page 6 of the policy under the large-lettered heading 'Premium Payment and Reinstatement' and a bold-face subheading entitled 'Payment of Premiums and Grace Period' the policy provides: 'A grace period of 31 days will be granted for the payment of each premium after the first, during which period the policy will continue in force. If the Insured dies during such period, any unpaid premium will be deducted from the amount otherwise payable under this policy.' For purposes of identification we designate this provision 'provision one.' On page 7 of the policy under a large-lettered heading entitled 'Insurance Options on Nonpayment of Premiums' the policy provides: 'The insurance options provided below are available if a premium is in default beyond the grace period. The option for Extended Term insurance will be automatically effective if premiums have been paid for at least a number of years for which a period of Extended Term insurance is first shown in the Table on page 8.' (Italics added.) For purposes of identification we shall refer to this provision as 'provision two.' Immediately following provision two, under the bold-face heading 'Extended Term Insurance' the policy provides: 'Under this option, the policy will be continued as nonparticipating paid-up Extended Term insurance. 'For a policy without any paid-up additions, dividend accumulations, or indebtedness, the amount of such insurance will be the Face Amount of Insurance, and the term of the insurance, measured from the due date of the premium in default, will be as specified in the Table on page 8.' (Italics added.) For purposes of identification we shall refer to this provision as 'provision three.' The table on page 8 of the policy clearly specifies that for a policy in force six months the period of extended term insurance is to be 60 days. P contends that the grace period and the extended term should run consecutively. P claimed the provisions were in conflict and ambiguous. The trial court ruled for D and P appealed.