Allen v. National Accident & Health Insurance

Stacy, C. J. Conceding without deciding that the policy was in force during the grace period of seven days from 1 September to 7 September, the failure to pay the monthly premium before the expiration of this period caused the policy to lapse, according to its terms, and to become void as of the due date. The acceptance of premiums thereafter, if any were accepted, had the effect of reinstating the policy prospectively, but not retroactively. Such is the language of the policy. Sanderlin v. Ins. Co., 214 N. C., 362; Gilmore v. Ins. Co., 214 N. C., 674; Hayworth v. Ins. Co., 190 N. C., 757, 130 S. E., 612. The contract is of the making of the parties. They have agreed upon its terms, provisions and limitations. Gorham v. Ins. Co., 214 N. C., 526; Whitaker v. Ins. Co., 213 N. C., 376, 196 S. E., 338; Mills v. Ins. Co., 210 N. C., 439, 187 S. E., 581; McCabe v. Casualty Co., 209 N. C., 577, 183 S. E., 743. The payment of premiums is of the essence of the undertaking and upon its compliance depends the life and success of the insurance company. Clifton v. Ins. Co., 168 N. C., 499, 84 S. E., 817. It is generally understood that the nonpayment of premiums when due, or within the period of grace thereafter, in the absence of waiver, automatically avoids a policy of insurance; Moore v. Accident Assuranee Corp., 173 N. C., 532, 92 S. E., 362; Knight v. Ins. Co., 211 N. C., 108, 189 S. E., 121; Trust Co. v. Ins. Co., 199 N. C., 465, 154 S. E., 743; Melvin v. Ins. Co., 150 N. C., 398, 64 S. E., 180. The language of Clark, C. J., in Hay v. Association, 143 N. C., 256, 55 S. E., 623, would seem to be appropriate here: “It is always sad when one who has made payments on his policy deprives his family of expected protection by failure to pay at a critical time. But insurance is a business proposition, and no company could survive if the insured could default while in good health, but retain a right to pay up when impaired health gives warning. It is a warning of which the company also has a right to take notice when asked to waive a forfeiture. It is the insured’s own fault when he does not make a payment as he contracted.” Having allowed the policy to lapse for nonpayment of premiums, the plaintiff is not entitled to recover. Brady v. Benefit Assn., 205 N. C., 5, 169 S. E., 823. Reversed.