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KAREN C. BIERER v. NATIONWIDE INSURANCE COMPANY (04/29/83)

filed: April 29, 1983.

KAREN C. BIERER, ADMINISTRATRIX FOR THE ESTATE OF DANIEL R. BIERER, III., AND KAREN C. BIERER, INDIVIDUALLY AND AS BENEFICIARY
v.
NATIONWIDE INSURANCE COMPANY, APPELLANT



No. 1017 Pittsburgh 1982, Appeal from the Order of the Court of Common Pleas, Civil Division, of Greene County at No. 62 May Term, 1976.

COUNSEL

Harry J. Cancelmi, Jr., Waynesburg, for appellant.

James Hook, Waynesburg, for appellees.

Popovich, Montgomery and Van der Voort, JJ. Van der Voort, J., files a dissenting statement.

Author: Popovich

[ 314 Pa. Super. Page 399]

On June 5, 1970, Daniel R. Bierer, III, appellee's husband, applied for and secured a life insurance policy in the amount of $10,000 from appellant, Nationwide Insurance Company. The policy contained a guaranteed insurability option rider which allowed the insured to apply for $10,000 additional insurance in five years. Douglas Black, appellant's agent who sold the original policy, came to appellee's home on April 28, 1975, for the purpose of explaining the aforesaid option rider. On that day, Mr. Bierer signed the application to purchase additional insurance as provided in the guaranteed option rider and received a new policy for the additional $10,000 insurance in return for a downpayment of $36.82,

[ 314 Pa. Super. Page 400]

    which represented two month's premiums. The application and new policy, as well as the original policy, provided that the new policy would not become effective before the stated option date, June 18, 1975. On May 21, 1975, appellee's husband was killed in a mining accident. Subsequent to the insured's death, Nationwide paid the proceeds of the original policy but denied liability on the option rider policy and refunded the premiums which had been paid thereon.

The case went to trial in May, 1982, and a jury rendered a verdict in favor of appellee for the face amount of the policy together with interest from the date of the insured's death. Appellant's post-trial motions were denied, and judgment was entered on the verdict.

Appellant raises one question on appeal:

"Does a beneficiary have a right to recover from the insurance company where the insured, pursuant to a 1970 whole life policy, exercised a guaranteed insurability option, applied for additional insurance on April 28, 1975, with express language in the original policy and application making additional insurance policy coverage effective on the option date, June 18, 1975, paid advanced premium, received a delivered policy also stating policy effective date of June 18, 1975, but insured died May 21, 1975, prior to the effective date?"

The answer to this question hinges on the application of the facts of this case to the rule in Collister v. Nationwide, 479 Pa. 579, 388 A.2d 1346 (1978), cert. denied, 439 U.S. 1089, 99 S.Ct. 871, 59 L.Ed.2d 55 (1979). We find that the Collister rule applies and, accordingly, affirm the judgment below.

In Collister, appellant's husband applied to appellee, Nationwide Life Insurance Company, for life insurance. Appellee, through its agent, accepted $60.66 from appellant's husband at the time of the application. This amount represented a two month premium payment in exchange for which appellant's husband received a "conditional receipt." Appellant's husband was killed in an automobile accident before ...


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