Editor's notes.

- In light of the similarities of the statutory provisions, decisions under former Code 1933, § 56-901, are included in the annotations for this Code section.

Purpose, effect, contents, and import determine if contract is insurance.

- Whether a contract is one of insurance is to be determined by the contract's purpose, effect, contents, and import and not necessarily by the terminology used and even though it contains declarations to the contrary. Benevolent Burial Ass'n v. Harrison, 181 Ga. 230, 181 S.E. 829 (1935) (decided under former Code 1933, § 56-901).

Policy of insurance on which premium has been paid is a contract between the insurer and the insured based on a valuable consideration. Sledd v. Pilot Life Ins. Co., 52 Ga. App. 326, 183 S.E. 199 (1935) (decided under former Code 1933, § 56-901).

Contract payable in goods or services.

- Contract may be one of life insurance though payable in goods or services of value. Benevolent Burial Ass'n v. Harrison, 181 Ga. 230, 181 S.E. 829 (1935); South Ga. Funeral Homes v. Harrison, 183 Ga. 379, 188 S.E. 529 (1936) (decided under former Code 1933, § 56-901).

Cardinal rule for construction of such contract is to ascertain the intention of the parties. Bullard v. Life & Cas. Ins. Co., 178 Ga. 673, 173 S.E. 855, answer conformed to, 49 Ga. App. 27, 174 S.E. 256 (1934) (decided under former Code 1933, § 56-901).

Contract will be construed most favorably for contractee.

- When the contract is ambiguous on the question of whether the contract should be treated as having a value commensurate with the amount paid in or as securing to the holder the element of a life insurance policy, it should, under the proper rule of construction, be given a meaning most favorable to the holder and favorable to the company on this question. Benevolent Burial Ass'n v. Harrison, 181 Ga. 230, 181 S.E. 829 (1935) (decided under former Code 1933, § 56-901).

Loss need not be paid directly to contractee.

- It is not essential that loss, damage, or expense indemnified against be paid to the contractee. The contract may constitute insurance if it is for the contractee's benefit and is a contract on which the contractee, in case of breach, may assert a cause of action. Benevolent Burial Ass'n v. Harrison, 181 Ga. 230, 181 S.E. 829 (1935) (decided under former Code 1933, § 56-901).

Life insurance in its pure form is when members pay premiums which when invested would, if the member lived exactly the average life, produce the sum agreed to be paid; those who do not reach the expected age gain and those who exceed the age lose, but in the long run there can be neither gain nor loss. South Ga. Funeral Homes v. Harrison, 183 Ga. 379, 188 S.E. 529 (1936) (decided under former Code 1933, § 56-901).

Insurable interest required only at inception of insurance contract.

- One may insure the life of another in the continuance of whose life one has an interest; this section says nothing about the continuance of such insurable interest, but seems to require only an insurable interest at the inception of the insurance contract. Chapman v. Lipscomb-Ellis Co., 194 Ga. 640, 22 S.E.2d 393 (1942) (decided under former Code 1933, § 56-901).

One who has no insurable interest in life of another person cannot procure and maintain a policy of insurance on the life of such person, naming oneself as the beneficiary. Gulf Life Ins. Co. v. Davis, 52 Ga. App. 464, 183 S.E. 640 (1936) (decided under former Code 1933, § 56-901).

Brother has no insurable interest in life of his sister merely because of such relationship; in order for a brother to have such insurable interest, it must appear that he is her heir at law or dependent on her in some way, or that the relation of debtor and creditor exists between them. Gulf Life Ins. Co. v. Davis, 52 Ga. App. 464, 183 S.E. 640 (1936) (decided under former Code 1933, § 56-901).

Premium on policy required and issued by lender not illegal or usurious.

- When lender requires, as collateral security for loan, that borrower obtain at the borrower's own expense a policy of insurance on the borrower's own life or that of some other person with a reputable insurance company doing business in this state, and the lender, being itself such a company, issues to the borrower a policy on the life of the borrower's son, which is assigned to the lender to secure the loan, the specified rate of interest charged on the loan being 2 percent below the maximum rate of interest that could be charged, and the amount of the annual premium for the insurance not being any more than the customary rate when policies of that kind were issued by the lender as an insurer to nonborrowers, such premium could not be counted as a charge by the lender for the money lent, thereby rendering the interest and charges for the loan more than the legal rate and therefore usurious. Sledd v. Pilot Life Ins. Co., 52 Ga. App. 326, 183 S.E. 199 (1935) (decided under former Code 1933, § 56-901).

"Duplicate" insurance policy rendered the original contract of insurance void, and evidence showed that it was the intent of both parties to include the same table of guaranteed values found in the original policy within the terms of the "new" policy. Brannen v. Gulf Life Ins. Co., 201 Ga. App. 241, 410 S.E.2d 763 (1991).

Stock certificates providing burial services held life insurance policies.

- Under the evidence, the judge was authorized to find that the contracts issued by the defendant company amounted in substance and effect to policies of life insurance, and that company, in the issuance of such contracts, was doing a life insurance business contrary to the laws of this state, notwithstanding the contracts issued to the holders were called stock certificates and entitled the holders to stated mortuary service or merchandise on conditions prescribed by the charter and by-laws of the company. Benevolent Burial Ass'n v. Harrison, 181 Ga. 230, 181 S.E. 829 (1935) (decided under former Code 1933, § 56-901).

Contracts issued by funeral company constituted life insurance policies.

- When it was shown that in consideration of the initial and installment payments provided for by the contract the defendants had agreed that so long as the contract remained of force the defendants would render to the person to whom the contract was issued all of the services customarily rendered by undertakers or funeral directors, including hearse service, all necessary embalming, directing, and conducting of funerals, etc., within a radius of 25 road miles, and to sell at wholesale cost price (plus transportation charges only) caskets, burial clothes, etc., to any contract holder for use in the funeral of any member of his or her family or dependents, the evidence authorized the grant of interlocutory injunction on the ground that the contracts issued by the company constituted policies of life insurance, and that the company, in the issuance of such contracts, was doing a life insurance business contrary to law. Clark v. Harrison, 182 Ga. 56, 184 S.E. 620 (1936); South Ga. Funeral Homes v. Harrison, 182 Ga. 60, 184 S.E. 875, later appeal, 183 Ga. 379, 188 S.E. 529 (1936) (decided under former Code 1933, § 56-901).

Employer's agreement not life insurance contract.

- In an action by a former employee to enforce an agreement by a former employer to pay the proceeds of a "key man" life insurance policy to the employee's estate, the trial court did not err in failing to charge on the definition of life insurance since the agreement was not a contract of life insurance and the employer was not an insurer. Primus Pharmaceuticals, Inc. v. Glovier, 215 Ga. App. 411, 450 S.E.2d 832 (1994).

Cited in Parker v. West View Cem. Ass'n, 195 Ga. 237, 24 S.E.2d 29 (1943); United Ins. Co. of Am. v. Hadden, 126 Ga. App. 362, 190 S.E.2d 638 (1972); Bohannon v. Manhattan Life Ins. Co., 555 F.2d 1205 (5th Cir. 1977).

Cemetery company contracts constitute life insurance policies contrary to law.

- When a private company engaged in the business of maintaining a cemetery and selling cemetery lots gave to each purchaser a supplemental written agreement to the effect that if any one or more of the purchaser's unmarried children between the ages of one and 19 die, then the cemetery company will furnish without cost such space or spaces for interment of the deceased child or children, provided that at that time no installment payments on the lot purchase agreement were in arrears, the contract was a contract of insurance and such a contract may not be lawfully made by a concern which was not licensed to engage in the life insurance business, in view of former Code 1933, § 56-2404 (see O.C.G.A. § 33-24-43). 1963-65 Op. Att'y Gen. p. 367.

Contract between college and student on life of sponsor for tuition grant.

- When a college, in consideration of monthly payments pursuant to an agreement with a student and a sponsor, assumes the obligation of furnishing a 100 percent tuition grant and refunding all moneys paid, to be performed upon the death of the sponsor, the contract constitutes a contract of life insurance; such an obligation is one to pay a sum of money as well as to furnish a thing of value, and it is immaterial whether the cost or value of such an undertaking on the part of the college is more or less than the consideration flowing to it. 1963-65 Op. Att'y Gen. p. 367.

Debt cancellation contract conditioned on borrower's death.

- National bank operating in Georgia may not enter into a debt cancellation contract providing that the debt will be automatically cancelled in the event of the borrower's death without complying with this title. 1963-65 Op. Att'y Gen. p. 457.

Am. Jur. 2d.

- 43 Am. Jur. 2d, Insurance, § 3.

14A Am. Jur. Pleading and Practice Forms, Insurance, § 153.

C.J.S.

- 44 C.J.S., Insurance, § 11 et seq.

ALR.

- Liability under policy of life insurance where insured is executed for crime, 36 A.L.R. 1255.

What constitutes insurance, 63 A.L.R. 711; 100 A.L.R. 1449; 119 A.L.R. 1241.

Validity and effect as against creditors of change of beneficiary or assignment of insurance policy from estate to individual, 106 A.L.R. 596.

Who entitled to proceeds of life insurance under policy naming two or more beneficiaries, in event of death of one or more but less than all of them before insured, 112 A.L.R. 729.

Insurance: construction of "sane or insane" provision of suicide exclusion, 9 A.L.R.3d 1015.

Insurable interest of brother or sister in life of sibling, 60 A.L.R.3d 98.

Construction and application of "key man" life insurance, 12 A.L.R.7th 6.