Northwestern Mutual Life Insurance v. Johnson

Background

A man named George P. Johnson bought two life policies. One named his wife as beneficiary and said the policy would be void if he died by his own hand within two years. The other named his estate and said the policy would be incontestable after one year but said nothing about suicide. Johnson later killed himself more than two years after the first policy and more than one year after the second. Lower courts ruled for the wife and the administrator, and certain legal questions were sent up to this Court for decision.

Reasoning

The Court was asked whether the written clauses prevented the insurer from paying when the insured later committed suicide. The opinion explained that a clause voiding the policy for suicide only within an early period and a clause making the policy incontestable after a year both show the same intent: once the stated time has passed, suicide—whether the insured was sane or insane—does not defeat payment. The Court noted that states may adopt different public policies, but, absent a state rule to the contrary, the clear language of these policies makes the companies liable.

Real world impact

The decision means beneficiaries and estates can collect life insurance when the insured commits suicide after the policy’s specified waiting or incontestability period. Insurers commonly use such clauses to create certainty, but state law can still alter outcomes. The Court answered the certified questions in the two cases in the affirmative.