Plaintiff appeals rejection of his demand for $500.00 allegedly due him as beneficiary
The operative facts are not disputed and, for all practical purposes, are stipulated to be as follows: On July 1, 1966, while in the employ of Avondale Shipyards, Inc., appellant purchased from defendant a group life and health insurance policy which covered appellant and appellant's dependents, including the now deceased minor, Ernest Ray Jennings. Appellant paid all premiums due through August, 1967. On August 21, 1967, appellant became totally and permanently disabled. On June 11, 1968, defendant waived premiums due on subject policy by endorsement as follows: "Waiver of Premium for total disability Approved 6-11-68." The death of Ernest Ray Jennings occurred January 5, 1969, from natural causes.
The salient issue of alleged termination must be resolved in the light of the pertinent policy provisions which read as follows:
"TERMINATION OF DEPENDENTS' LIFE INSURANCEE
WAIVER OF PREMIUM BECAUSE OF TOTAL DISABILITY
Determination of the issue presented depends upon whether or not the waiver of
In essence, appellant maintains his personal insurance never terminated for the reason that on June 11, 1968, defendant waived payment of premiums because of his total disability. His personal insurance having never terminated, appellant contends that his insurance with respect to his dependents never terminated. In addition, appellant argues the policy provisions are ambiguous and lead an ordinary individual to believe that a waiver of premiums by the insurer would continue in effect the coverage afforded both the insured and his dependents.
On the other hand, defendant maintains that appellant's personal insurance terminated as of September 1, 1967, following appellant being declared totally disabled on August 21, 1967, and that such termination ended the coverage afforded appellant and his dependents alike. Thereafter, according to defendant, appellant alone continued to be insured pursuant to the waiver of premium provision only, which provision establishes specific rights and obligations separate and distinct from those existing under the general policy provisions. The waiver of premiums provision, defendant contends, by its own terms, applies only to the disabled party, and is devoid of any suggestion that any amount will be paid thereunder except the amount of life insurance payable to the disabled party.
Appellant correctly contends that in the interpretation of insurance contracts, doubtful or ambiguous clauses or provisions are to be construed favorably to the insured and against the insurer. Graves v. Traders and General Insurance Company, La.App., 200 So.2d 67. This rule of strict construction, however, does not authorize perversion of language or the creation of ambiguity where none exists. J. M. Brown Const. Co. v. D & M Mechanical Contr., Inc., La.App., 222 So.2d 93.
A contract of insurance, like any other agreement, is the law between the parties, and every stipulation therein must be construed as written. The rules established for the interpretation of written instruments in general apply in the construction of insurance policies. Harmon v. Lumbermen's Mutual Casualty Company, 247 La. 263, 170 So.2d 646.
Courts must give legal effect to the provisions of an insurance policy according to the true intent of the parties, which intent must be determined in the light of the policy provisions when the policy terms are clear and unambiguous and lead to no absurd consequences. LSA-C.C. arts. 1901, 1945; Vidrine v. Southern Farm Bureau Casualty Insurance Company, La.App., 247 So.2d 660.
The words used in insurance contracts are to be understood in their common and usual significance, without attending so much to grammatical rules, as to general and popular use. LSA-C.C. art. 1946; Harmon, above.
We find no ambiguity in the pertinent provisions of the contract in question. Section (1) of the provision entitled Termination of Dependents' Life Insurance clearly provides that coverage of dependents terminates upon termination of the insurance afforded the named insured. Termination as to the named insured (appellant) occurs on the last day of the insurance month coincident with or next following the date of termination of the insured's active, full time employment. Since appellant became totally disabled August 21, 1967, the last date of coverage afforded his dependents was August 31, 1967. It follows that as of September 1, 1967, appellant was no longer insured, except as provided for under the waiver of premium provision above quoted.
From the foregoing, we deduce that the contract intended that total disability of the insured would transform the policy from one which covered both the insured and his dependents into an agreement which covered the insured alone, according to the terms and conditions of the waiver of premium paragraph.
We do not find the waiver of premium provision either ambiguous or misleading. It expressly provides for a qualified or conditional coverage of the named insured only. We cannot make a new contract for the parties by construing the plain and unequivocal language to revive terminated coverage, or extend similar qualified coverage to include dependents. Such a construction, we believe, would do violence to what appears to be the clearly expressed intent of the contracting parties.
We find that upon the death of appellant's minor son, Ernest Ray Jennings, insurance as to said dependent had previously terminated.
The judgment of the trial court is affirmed; appellant to pay all costs of these proceedings.