Plaintiff, as an investment strategy, purchased the existing life insurance policy of a person with whom he had no relationship but whose purchase of the policy provided the required insurable interest. The policyholder failed to make a required policy payment prior to the end of a grace period and the insurance company canceled the policy. Plaintiff then filed a lawsuit alleging that the defendant improperly canceled the policy without providing the notice or six-month grace period required under Illinois law. The Seventh Circuit affirmed, finding that the undisputed facts showed that the required premiums for the policy were payable in monthly intervals, exempting the policy from the notice and grace-period requirements of 215 ILCS 5/234. (ROVNER and SCUDDER, concurring)
Federal 7th Circuit Court
Civil Court
Insurance Coverage