Cook v. Equitable Life Assurance Society
428 N.E.2d 110 (1981)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
An attempt to change the beneficiary of a life insurance policy by will, without substantially complying with the change-of-beneficiary procedures prescribed in the policy, is ineffective.
Facts:
- On March 13, 1953, Douglas D. Cook purchased a life insurance policy from Equitable, naming his wife, Doris J. Cook, as the beneficiary.
- The policy contained a specific provision requiring written notice to the company and an endorsement on the policy to change the beneficiary.
- Douglas and Doris divorced on March 5, 1965; their divorce decree contained a general release of all claims against each other but did not mention the insurance policy.
- After the divorce, Douglas stopped paying premiums, and the policy was converted to a paid-up term policy.
- On December 24, 1965, Douglas married Margaret A. Cook, with whom he later had a son, Daniel J. Cook.
- On June 7, 1976, Douglas created a holographic will bequeathing his insurance policy with Equitable to Margaret and Daniel.
- Douglas never notified Equitable of his intent to change the beneficiary according to the policy's terms.
- Douglas died on June 9, 1979, fourteen years after his divorce and three years after writing the will.
Procedural Posture:
- After the death of Douglas D. Cook, his second wife, Margaret A. Cook, filed a claim with Equitable for the insurance policy proceeds.
- Equitable filed a complaint in interpleader in the Bartholomew Circuit Court (the trial court), depositing the policy proceeds with the court to have it determine the proper beneficiary.
- Both the appellant (Margaret A. Cook, for the estate and her son Daniel) and the appellee (Doris J. Cook Combs) moved for summary judgment.
- The trial court granted summary judgment in favor of Doris J. Cook Combs, the named beneficiary.
- Margaret A. Cook appealed the trial court's entry of summary judgment.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does an insured's holographic will, which purports to bequeath a life insurance policy to a new beneficiary, effectively change the beneficiary when the insured did not follow the change-of-beneficiary procedures outlined in the policy?
Opinions:
Majority - Ratliff, Judge
No. An attempt to change the beneficiary of a life insurance contract by will, in disregard of the methods prescribed in the contract, will be unsuccessful. Indiana law adheres to the majority rule that requires strict or substantial compliance with the policy's provisions to effect a change of beneficiary. The court recognized limited equitable exceptions, such as when an insured has done everything in their power to effect the change but is prevented by circumstances beyond their control. Here, Douglas had ample time and opportunity—fourteen years after his divorce and three years after writing his will—to comply with the policy's simple requirements but failed to do so. The policy provisions protect not only the insurer but also the insured and the named beneficiary, who are entitled to rely on the certainty of the contract. Merely expressing intent in a will is insufficient to override the explicit terms of the insurance policy.
Analysis:
This decision reaffirms the strong majority rule that requires substantial compliance with an insurance policy's change-of-beneficiary provisions, prioritizing contractual certainty over a testator's demonstrated intent. The court narrowly construes the equitable 'substantial compliance' exception, limiting its application to cases where an insured's efforts are thwarted, not merely neglected. This ruling solidifies the principle that life insurance policies are non-probate assets that pass outside of a will unless the policy's specific change procedures are followed. For legal practitioners, this case serves as a critical reminder to advise clients to update beneficiary designations directly with insurance providers, as a will is an unreliable and generally ineffective tool for this purpose.
Unlock the full brief for Cook v. Equitable Life Assurance Society