Knights Templars' & Masons' Life Indemnity Co. v. Jarman
Headline: State suicide law upheld, making an insurer pay a 1885 life policy and paid assessments despite later company rule changes and assessment-plan arguments.
Holding: The Court held the Missouri statute applies to an 1885 life policy, treating 'suicide' as death by one's own hand regardless of sanity, and required the insurer to pay the full policy and assessments.
- Requires insurers to pay full policy plus paid assessments when statute applies.
- Treats 'suicide' as death by one's own hand, regardless of mental state.
- Prevents insurers from retroactively cutting benefits via later rule changes.
Summary
Background
The parties were a life insurance company (an Illinois corporation) and the widow of Jarman, a man who held a policy issued in 1885. Jarman died in 1898 from a self-inflicted gunshot while the record showed he was insane at the time. The widow sued to collect the $5,000 policy and the assessments Jarman had paid, while the company relied on policy language and later changes in law and its rules to avoid full payment.
Reasoning
The Court addressed whether Missouri's suicide statute (enacted 1879) barred the insurer from using suicide as a defense and whether 'suicide' meant only self-killing while sane. The Court interpreted 'suicide' in the statute in its ordinary sense - death by one's own hand - without regard to mental condition, and it held that the statute made policy clauses to the contrary void. The company’s claim that an 1887 law for assessment companies removed the statute’s effect was rejected for this policy because the company did not begin doing business under the assessment law until 1888, and a later 1897 amendment restored the statute’s application to assessment companies. The Court also held that subsequent changes to the company’s constitution limiting repayment did not apply retroactively to this existing policy.
Real world impact
The decision affirms a judgment requiring the insurer to pay the full policy amount and the assessments already paid. It confirms that state law can override policy clauses excluding suicide and that insurers cannot retroactively shrink benefits through later corporate rule changes for past policies.
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