State ex rel. Smrha v. Cosmopolitan Old Line Life Insurance

To me, the controlling question in this case is one of public policy. Shall an insurance company be permitted to collect premiums on a life insurance obligation, create cash values out of the money collected, and then confiscate or forfeit such rights on a premium default? I think not. The law abhors forfeitures generally, and in the case of insurance contracts they are quite intolerable.

The fact that the contract in this case was labeled a “thrift certificate” and combined a savings and insurance feature should not enable the company to dodge the statutes regulating the conduct of life…