Equitable Life Insurance Co. v. Verploeg
In Equitable Life Insurance Co. v. Verploeg, 123 Colo. 246, 227 P.2d 333 (1951), the insurer issued three life insurance policies to the insured. All three policies contained a provision that disability benefits were to be terminated upon insured's engaging in military service in time of war.
When the insurer learned that the insured had been ordered into active duty, it notified him that the disability benefits had been terminated and enclosed a check representing a refund of unearned premiums under the policies.
The insured later endorsed and cashed the refund check. In reversing the trial court ruling in favor of the insured, the supreme court stated: "We believe that, under the facts as disclosed, there has been a rescission of the disability benefits in the policies in dispute." Equitable Insurance Co. v. Verploeg, supra, 123 Colo. at 252, 227 P.2d at 335 .
The Verploeg court went on to point out that the insured had retained the check for over four months, and had also endorsed and negotiated it. In addition, the court stated:
After that a period of over five months ensued before insured petitioned for reinstatement under the policy provisions. This latter act would seem again to confirm the fact that insured knew, and recognized, that the disability provisions were no longer effective. In the meantime he had continued to pay ordinary life premiums on the policies, while no payments were being made on account of the disability provisions." Equitable Life Insurance Co. v. Verploeg, supra, 123 Colo. at 253, 227 P.2d at 336.