Yes. The Court decided that a life insurance policy is a piece of property. Just like you can sell your house to anyone, you can sell your life insurance policy. The main rule against insuring a stranger's life is to stop people from gambling on when someone might die. But here, Burchard bought the policy for himself first, which was perfectly legal. He then chose to sell it to someone he trusted. Stopping him from selling it would make his policy less valuable right when he needed the money most.

Yes, it's perfectly okay to sell your life insurance policy to someone else, even if they don't have a personal stake in your survival. Because the original policy was legitimate when Burchard bought it, the later sale doesn't make it improper. The main concern with life insurance is preventing situations where someone might want another person to die for financial gain. But when you sell a policy that you already own, you're choosing who to trust with this valuable item. Life insurance has become an important way for people to invest and save money. If we didn't allow people to sell their policies to whoever they want, these policies would be worth much less to their owners. Looking at previous court decisions and the laws in most states, we believe that once a life insurance policy is properly started, it becomes a piece of property that can be sold like other things you own.

<?xml version="1.0" encoding="utf-8"?>
<opinion type="majority">
<author id="b208-5">
 Mr. Justice Holmes
 </author>

 delivered the opinion pf the court.
 

 This is a bill of interpleader brought by an insurance company to determine whether a policy .of insurance issued to John C. Burchard, nojv deceased, upon his life, shall be paid to his administrators or to an assignee, the company having turned the amount into court. The material facts, are that after he had' paid two premiums and a third was overdue, Burchard, being in want and needing money for a surgical operation, asked Dr. Grigsby to buy the policy and sold it to him in consideration of one hundred dollars and Grigsby’s undertaking to pay- the premiums due or to become due; and that Grigsby had no interest in the life of the assured. The Circuit Court of' Appeals in deference to some intimations of this court held the assignment valid only to the extent of the money actually given for it and the premiums subsequently paid. 168
 
 Fed.
 
 Rep. 577, 94 C. C. A. 61.
 

 Of course the ground suggestéd for denying the validity of an assignment to a person having no interest in the life insured is the public policy that refuses to allow insurance to be taken out by such persons in the first place. A contract of insurance upon a life in which the insured has no interest is a pure wager that' gives the insured a sinister counter interest in having the life come to an end. And
 
 *155
 
 although that counter interest always exists, as early was emphasized for England in the famous case of Wainewright (Janus Weathercock), the chance that in some cases-it may prove, a sufficient motive for crime is greatly enhanced if the whole world of the unscrupulous are free to bet on what life they choose. The very meaning of an insurable interest is an interest in having the life continue and so one that is opposed to crime. And, what perhaps' is more important, the existence of such an interest makes a roughly selected class of persons who by their general relations with the person whose life is insured are less likely than criminals at large to attempt to compass his death.
 

 But when the question arises upon an assignment it is assumed that the objection to the insurance as a wager is out of the case. In the present instance the policy was perfectly good. There was a faint suggestion in argument that it had bécome void by the failure of Burchard to pay the third premium'
 
 ad diem,
 
 and that when Grigsby paid he was making a new contract. ' But a condition in a policy that it shall be void if premiums are not paid when due, means only that it shall be voidable at,the option of the company.
 
 Knickerbocker Life Insurance Company
 
 v.
 
 Norton,
 
 96 U. S. 234;
 
 Oakes
 
 v.
 
 Manufacturers’ Fire &amp; Marine Ins. Co.,
 
 135 Massachusetts, 248. The company waived, the breach, if there was one, and the original contract with Burchard remained on foot. No question as to the character of that contract is before us. It has been performed and the money is in court. But this being so, not only does the objection to wagers disappear, but also the principle of public policy referred to, at least in its most convincing form. The danger that might arise from a general license to all to insure whom they like does not exist. Obviously it is a very different thing from granting such a general license, to allow the holder of a valid insurance upon his own life to transfer it to one whom he, the party most concerned, is not afraid to tru'st. The law has no
 
 *156
 
 universal cynic fear of the temptátion opened by a pecuniary benefit accruing upon a death. It shows no prejudice against remainders after life estates, even by the rule in
 
 Shelley’s Case.'
 
 Indeed, the ground of the objection to life insurance without interest in the earlier English cases was not the temptation to murder but the fact that such wagers came to be regarded as a mischievous kind of gaming. St. 14 George III, c. 48.
 

 ' On the other hand, life insurance has become in our days one of the best recognized forms of investment and self-compelled saving^ So far as reasonable safety permits, it is desirable to give to life policies the ordinary characteristics of property. This is recognized by the Bankruptcy Law, § 70, which provides that unless the cash surrender Value of a policy like the one before us is secured to the trustee within thirty days after it has been stated the policy shall pass to the trustee as assets. Of course the trustee may have no interest in the bankrupt’s life. To deny the right to sell except to persons having such an interest is to diminish appreciably the value of the contract in the owner’s hands. The collateral difficulty that arose from regarding life insurance as a contract of indemnity only,
 
 Godsall
 
 v.
 
 Boldero,
 
 9 East, 72, long has disappeared.
 
 Phœnix Mutual Life Ins. Co.
 
 v.
 
 Bailey,
 
 13 Wall. 616. And cases in which a person having an interest lends himself to one without any as a cloak to what is in its inception a wager have no similarity to those where an honest contract is sold in good faith.
 

 Coming to the. authorities in this court, it is true that there are intimations in favor of the result come to by the Circuit Court of Appeals. But the case in which the strongest of them occur was one of the type just referred to, the policy having been taken out for the purpose of allowing a stranger association to pay the premiums and receive the greater part of the benefit, and having been assigned to it at once.
 
 Warnock
 
 v.
 
 Davis,
 
 104 U. S. 775.
 
 *157
 
 On the other hand it has been decided that a valid policy is not avoided by the cessation of the insurable interest, even as against the insurer, unless so provided by the policy itself.
 
 Connecticut Mutual Life Ins. Co.
 
 v.
 
 Schaefer,
 
 94 U. S. 457. And expressions more or less in favor of the doctrine that we adopt are to be found also in
 
 Ætna Life Ins. Co. v. France,
 
 94 U. S. 561.
 
 Mutual Life Ins. Co.
 
 v.
 
 Armstrong,
 
 117 U. S. 591. It is enough to say that while the court below might hesitate to decide against the language of
 
 Warnock
 
 v.
 
 Davis,
 
 there has been no decision that precludes us from exercising our own judgment upon this much debated point. It is at least satisfactory to learn from the decision below that in Tennessee, where this assignment was made, although there has been .much division of opinion, the Supreme Court of that State came to the conclusion that we adopt, in an unreported case,
 
 Lewis
 
 v.
 
 Edwards,
 
 December 14, 1903. The law in England and the preponderance of decisions in our state courts are on the same side.
 

 Some reference was made to a clause in tne policy that "any claim against the company arising under any assignment of the policy shall be subject to proof of interest.” But it rightly was assumed below that if there was no rule of law to that effect and the company saw fit to pay, the clause did not diminish the rights of Grigsby as against the administrators of Burchard’s estate.
 


 Decree reversed.
 

<judges id="b211-7">
 Me. Justice Lueton took no part in the decision of this case.
 </judges>
</opinion>

Yes. A life insurance policy is not merely a contract but a form of property that can be sold or assigned. The public policy against wager contracts, which prohibits taking out a policy on a stranger's life, does not apply when a policy is validly issued to the insured and later transferred in good faith. The insured, as the party most concerned with his own life, is free to transfer the policy to someone he trusts. Denying the right to sell the policy to anyone, regardless of insurable interest, would diminish its value as an asset, particularly for an owner who needs to access its value. This distinguishes a legitimate assignment from a transaction where a policy is taken out from its inception as a cloak for a wager by a person without an insurable interest.

Yes. The assignment of a life insurance policy to a person without an insurable interest is valid and does not violate public policy when the original policy was validly obtained. Because the policy was initially valid and legitimate, the subsequent assignment does not transform it into an improper wager on human life. The public policy concerns that prohibit a person from initially taking out insurance on a life in which they have no interest do not apply with the same force to assignments of existing policies. When a policy is first obtained by someone without an insurable interest, it creates a 'sinister counter interest' in having the life end, essentially making it a wager. However, when a valid policy is merely transferred, the original policyholder—the person most concerned—has chosen whom to trust with this property. The law does not universally fear pecuniary benefits accruing upon death, as evidenced by its acceptance of remainders after life estates. Furthermore, life insurance has evolved into a recognized form of investment and self-compelled saving. Because it is desirable to give life policies the ordinary characteristics of property, restricting the right to sell only to those with an insurable interest would significantly diminish the value of these contracts to their owners. While there are some prior cases with language suggesting limitations on assignments, none directly preclude our judgment on this matter. The law in England and the preponderance of decisions in state courts support this position. Therefore, Dr. Grigsby, as the assignee of a valid policy, is entitled to the full proceeds.

Grigsby v. Russell

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