MANUFACTURERS LIFE INSURANCE CO v ADDISON, NO 1982 (2) ZLR 73 (S)

Flynote

Insurance — "loans" under policies of insurance — whether in reality advances against rent payable under policy — determined by normal principles of construction of contracts — Insurance Act [Chapter 196] — section 41(1) — effect of.

Headnote

In deciding whether a "loan" made under a life insurance policy is in truth a loan, creating an indebtedness on the part of the insured to the insurer, or whether it is an advance against the sum payable when a claim arose under the policy, the Court must construe the policy according to the ordinary principles of construction, giving the language its ordinary, normal meaning unless the context otherwise requires. Where a policy described the transaction as a loan and referred to an indebtedness on the part of the insured, there is a clear indication that the transaction is a loan and an obligation on the part of the insured to the insurer.

Section 41 (1) of the Insurance Act [Chapter 196] is designed to protect surviving dependence in the event of an insured person's creditors seeking to attach a life policy he has effected on's life which has endured for three years. It excludes from his assets any life policy, not exceeding $20 000 in value. If a person has lent money to an insured on the security of the policy, he has a claim against the insured's deceased's estate.