Life Insurance And Warranties

Parker County life insurance lawyers know how the courts look at warranties in life insurance policies.

As stated in the 1997, 5th Circuit opinion styled, Riner v. Allstate Life Insurance Company, “Warranties in insurance applications are strongly disfavored in the law, and even fairly obvious attempts to create warranties in the application process have been rejected by Texas Courts.”  There is a line of cases holding the same as Riner.  Courts thus have been disinclined to find that contract language creates a warranty or condition precedent unless the language allows no other conclusion.

The language used the 1966, Texas Supreme Court case, Great American Reserve Insurance Co. v. Britton, said that “the policy shall not take effect until it has been delivered to its owner during the lifetime and good health of the Insured.”  The court found this was a condition precedent.

Another example of the courts finding a condition precedent is the 1961, Texas Supreme Court case, Lincoln Income Life Ins. Co. v. Mayberry, where the language stated, “This policy shall be voidable by the Company if on its date of issue the insured is not in sound health.”

Another example is in the 1931, Texas Supreme Court case, American National Insurance Company v. Lawson, where the language was, “provided however that no obligation is assumed by the Company prior to the date hereof not unless on said date the Insured is alive and in sound health.”

Other samples of language the courts have found to create a condition precedent include:  “policy shall be effective only if condition that proposed insured was insurable and acceptable was fulfilled” and “This Policy shall become effective on the Policy Date if the Insured is then alive and in good health, but not otherwise.”

Situations and language will vary.  If / when a claim for life insurance benefits is denied, an experienced life insurance lawyer needs to be consulted.