In H A (minor) v N M the plaintiff filed a statement of claim with the Court of Family Affairs arguing that she was entitled to receive one-quarter of the insurance benefits which were paid, following her father's death, to his wife, who was not her mother.(1) Since the policy wording was ambiguous regarding the identity of the beneficiary in case of death, the court was required to address the interpretation of the definition of 'beneficiaries' in the policy.
The court ruled that an examination of the intentions of the parties who had purchased the policy indicated that the parties intended the deceased's widow to be the sole beneficiary.
In 2008 Mr N A died as a result of a car accident. He was insured together with his wife under a personal accident insurance policy. According to the inheritance order, which was issued after the occurrence, the deceased's widow was entitled to receive half of his estate; the other half was divided equally between the deceased's two daughters (who were not the widow's daughters).
In addition to her share in the estate, the deceased's widow received the full amount of the insurance benefits from the policy.
A daughter of the deceased filed a statement of claim with the Court of Family Affairs arguing that, according to the inheritance order, she was entitled to receive one-quarter of the insurance benefits paid to the deceased's widow.
The policy was worded as follows: "the beneficiaries are: the insureds or their legal heirs in case of death."
In light of the policy's wording, the plaintiff argued that, since she was the legal heir of the deceased, she was entitled to receive her share of the insurance benefits that were paid in full to the deceased's widow.
The deceased's widow objected, arguing that the policy explicitly determined that the principal beneficiaries in the policy were "the insureds"; only in the case of the death of both insureds would the legal heirs be the beneficiaries. The deceased's widow argued that where there are several interpretations of a policy's wording, one should examine the intention of the insured at the time the contract was entered into.
The deceased's widow stated that the following indications proved that the proper and sensible interpretation of the policy was that the insurance benefits should be paid to her:
- She had extended her own personal accident policy to include the deceased; and
- She owned the policy and had paid the premium from her own account.
The court addressed the question of how the beneficiary section in the policy should be interpreted: whether both insureds had to die in order for the insurance benefits to be paid to their legal heirs or whether, if one of the insureds died, his or her heirs would be entitled to receive insurance benefits. The court examined the wording of the policy, the intention of the parties to the agreement and the circumstances which led the insureds to enter into the agreement in the first place.
The court embraced the position of the Supreme Court in interpreting a contract which stated that "the intention of the Parties is the goal and the essence that stood before the parties when entering into a contract".
The court denied the plaintiff's claim and determined that the deceased's widow was the sole beneficiary in the policy. The court stated that, as the widow was the owner of the policy and as her and the deceased's names were entered under "insureds' details" in the insurance forms, the reasonable and sensible interpretation of the policy was that the widow – who had purchased the policy and paid the premium – intended that she and the deceased would be the beneficiaries in case of death or injury.
For further information on this topic please contact Karin Barel at Levitan, Sharon & Co by telephone (+972 3 688 6768) or email ([email protected]). The Levitan, Sharon & Co website may be accessed at www.levitansharon.co.il.