United States v. McClure

Background

John F. McClure, a World War veteran, let his yearly renewable term insurance lapse by failing to pay a 1919 premium while he was suffering a compensable disability for which payment had not been made. He later became totally and permanently disabled in 1929, and uncollected compensation due him was enough to pay the missed premiums. McClure sued on the policy and, after his death, his administratrix pursued recovery under the statute that allows revival of lapsed policies when unpaid compensation exists. The District Court ruled for the government; the Circuit Court of Appeals reversed.

Reasoning

The Court examined the War Risk Insurance Act and its amendments. It found that Congress originally allowed reinstatement and revival of lapsed yearly term insurance in one provision, then split that into two separate rules. One rule (§304) required action by the veteran to reinstate and included a cutoff date; the other (§305) authorized automatic revival when a veteran’s insurance lapsed while unpaid compensation remained. Congress repeatedly amended the dates and expressly limited reinstatement but did not attach the same cutoff or beneficiary restrictions to revival under §305. Reading the special revival provision alongside the general conversion rule (§301), the Court concluded the specific §305 benefit controls and revives McClure’s lapsed policy.

Real world impact

The decision means veterans whose policies lapsed while they were owed unpaid disability compensation can have those policies restored under §305 without taking action. It distinguishes automatic revival from voluntary reinstatement and follows the beneficiary limits Congress placed on revived policies. The judgment of the Court of Appeals was affirmed, restoring coverage in this case.