## Facts

- Metropolitan issued a $15,000 life insurance policy on Vincent E. Furtado (age 18) on February 12, 1973; his father, Malcolm B. Furtado, was the beneficiary.
- Premiums of $26.45 were due monthly on or before the 12th; six premiums (February–July 1973) were paid.
- The August 12, 1973 premium was not paid, and no later premiums were paid.
- Vincent died on October 26, 1973, 75 days after the August 12 due date.
- The policy provided (1) a 31-day grace period during which the policy remained in force, and (2) after default beyond the grace period, nonforfeiture options including automatic extended term insurance if the table requirements were met.
- The policy’s table fixed the extended term insurance period at 60 days for the premium history at issue and stated that the period was measured from the due date of the unpaid premium.
- Malcolm sued for declaratory relief seeking policy proceeds; after a bench trial, the court found the policy lapsed before death and entered judgment for Metropolitan.

## Issues

1. Whether the policy’s extended term insurance period began at the end of the 31-day grace period or on the due date of the unpaid premium.
2. Whether the policy language was ambiguous such that it had to be construed to provide coverage at the time of the insured’s death.

## Decision

- The Court of Appeal affirmed judgment for Metropolitan.
- The policy, read as a whole, unambiguously measured the 60-day extended term insurance period from the due date of the premium in default, not from the grace period’s expiration.
- Because the insured died 75 days after the August 12 due date, he died after both the grace period and any extended term coverage had ended; Metropolitan owed no death benefit.

## Legal Principles

- Insurance contracts are interpreted as a whole, giving effect to specific temporal measurements stated in the policy.
- A clause stating that an extended term period is “measured from the due date” of the defaulted premium controls the commencement of that period, even if options become available only after the grace period ends.
- Contra proferentem applies only when policy language is reasonably susceptible to more than one construction; courts do not create ambiguity by isolating phrases or “double counting” separate protective periods.

## Conclusion

The court held that the life insurance policy lapsed before the insured’s death because the 60-day extended term coverage ran from the unpaid premium’s due date, and the policy’s references to default beyond the grace period did not shift the start of the extended term period or create ambiguity requiring coverage.


Furtado v. Metro. Life Ins. Co., 60 Cal. App. 3d 17, 131 Cal. Rptr. 250 (Ct. App. 1976)