Insurance, Disability, Surrender of policy. Election.
Under provisions of a contract of group disability insurance and of a certificate issued to an insured, that the insured, upon surrender of the certificate, might receive a cash surrender value if at that time he was not entitled to receive any disability benefits thereunder, a surrender of the certificate and receipt of the cash surrender value constituted a binding election barring an action by him for benefits for a previous disability.
LUMMUS, J.
The plaintiff was an employee of the defendant insurance company, which issued to him a certificate of group insurance, providing for the payment of $40 a week in the event of total disability.
The plaintiff was paid disability benefits from September 10, 1934, to sometime in December, 1934, when he returned to work. He became disabled again on April 25, 1935, and remained disabled until June 11, 1935.
After the plaintiff ceased to be an employee, whether that occurred on April 25, or June 11, 1935, he elected, as he had a right to do under the certificate and the group contract under which the certificate was issued, to receive the cash surrender value of the policy, and on June 13, 1935, he did receive that value, which was the sum of $305.20. He surrendered his certificate to the defendant as the group contract required him to do before the cash surrender value could become payable. The exact language of the provision for surrender is as follows: "If on the date of such termination of employment the employee is not receiving or entitled to receive any retirement annuity payments or disability benefits hereunder, the insurance company will pay to the employee a cash surrender value, the amount of which shall be the percentage set forth in the schedule on page 3 hereof, of the aggregate of the employee's contributions which were actually made under the group contract by such employee and received by the insurance company."
In an action to recover disability benefits for the period of disability in the spring of 1935, the trial judge directed a verdict for the defendant, subject to the plaintiff's exception.
When the plaintiff made his election, the disability benefits due him amounted to less than $270, but by accepting the surrender value he could obtain $305.20. For all that appears in the record, his period of disability was at an end. He may have desired to end his employment and his insurance altogether. He could obtain the surrender value only on the footing that he was "not . . . entitled to receive any . . . disability benefits" under the certificate surrendered. By the surrender the whole foundation of his claim ceased to exist. He must be held to his election.
Exceptions overruled.
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