NATIONAL LIFE & CASUALTY INSURANCE COMPANY, an insurance corporation, Appellant,
Lester P. BLANKENBILLER, Appellee.
Rehearing Denied May 2, 1961.
[89 Ariz. 254] Lewis, Roca, Scoville, Beauchamp & Linton, and John P. Frank, Phoenix, for appellant.
McRae, Elliott & Thompson, Phoenix, for appellee.
This is an appeal from a judgment of the superior court of Maricopa County entered April 24, 1958.
Appellee (hereinafter called plaintiff) brought suit to recover the face amount of a contract of life insurance issued by appellant (hereinafter called defendant), the National Life & Casualty Insurance Company. Plaintiff's policy is what is defined in the Arizona Code as a 'Benefit certificate', Section 61-1002, A.C.A.1939, 1952 Supp. It was issued August 14, 1951, without a medical examination on the basis of a written application. The policy lapsed March, 1953, and was reinstated May, 1953, on the basis of a further application. This application alleged that the insured was in good and vigorous health and free from disease, ailment or disability. The insured died April 13, 1955. She had suffered from hypertension and uremia since 1951, as well as chronic nephritis, and cardiovascular and renal disease, which the deceased and the plaintiff (husband of deceased) well knew. The action was filed after claim had been rejected by the company which tendered back premiums to the beneficiary. The plaintiff refused to accept.
The trial judge ruled that the defenses upon the policy were barred by the incontestability clause, the two-year period having run from the date of reinstatement of the policy. The defendant contends that the incontestability clause does not bar an insurance company from restricting coverage to subsequently acquired diseases. With this contention we cannot agree. The controlling Arizona statute is as follows:
Section 61-1017, A.C.A.1939, 1952 Supp.
'Benefit certificate requirements.----
'(a) Each benefit certificate shall provide that:
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'3. The certificate, including any written amendment thereto, and, at the option of the corporation, the application therefor when attached to the policy at the time of issuance, constitute the entire contract between the parties and is incontestable after two years from the date of issuance or two years from the date of last reinstatement, except for non-payment of premiums or assessments.'
[89 Ariz. 255] The statute is plain and unambiguous. Nonpayment of premiums or assessments constitutes the only exception to incontestability. This Court is not authorized to read into the statute any other exceptions.
The Incontestability Clause in the policy is contained in one sentence under the heading 'Incontestability' and reads as follows:
'Incontestability: This Policy shall be incontestable after it has been in force during the lifetime of the Insured for a period of two years from its date of issue or date of last reinstatement except for nonpayment of premiums; provided, however, that if the death or disability of the Insured results directly or indirectly or is contributed to wholly or in part from any disease or disability which existed prior to the issuance of this Policy, then the amount payable hereunder on ...