In a case where Party A and Party B were the insured of Party B and Party B, and the beneficiary of Party B was the mother at the time of death, and Party B and Party B were either the principal contract and nine special agreements at the time of hospitalization and injury, and the insurance premium was unpaid, and Party B sent a peremptory notice stating that Party B was “the insurance contract is terminated if Party B did not pay the insurance premium by the maximum payment period;” and Party A, who did not pay the insurance premium by the maximum payment period, suffered disability due to a traffic accident during the Otoba, the case holding that Party B and Party C were “insurance for Party B” under Articles 639 and 650(3) of the Commercial Act by main contract and special agreement, and rejected Party A and Party C’s claim for the insurance money.

In a case where Party A and Party B sent a peremptory notice stating that “A” is an insurance company as the insured, and the insured’s “in the event of death” is her mother; Party B is her mother; “in the event of hospitalization and injury”; Party A is a principal contract and special agreement for hospitalization; special agreement for surgery; CI (Class IV); special agreement for family import; regular special agreement for life insurance; and in the event of unpaid insurance premium, Party B’s insurance contract composed of a special agreement for accident death; Party B’s insurance contract is terminated if the insurance premium is not paid within the maximum payment period; Party B was an illegal traffic accident; Party B was unable to claim for the above insurance premium at the time of death of Party B; Party B’s insurance contract without the maximum payment period; and Party B’s insurance contract cannot be deemed as an “insured Party B’s life insurance contract” as an “insured Party B’s life insurance beneficiary”; and thus, Party B’s insurance contract and special agreement for life insurance without the maximum payment period for Party B’s death” cannot be deemed as an “insured Party B’s life insurance contract”.

Articles 639, 650(2) and (3), 658, and 733 of the Commercial Act

Plaintiff 1 and one other (Attorney Lee Young-soo, Counsel for the plaintiff-appellant)

Puden Social Life Insurance Co., Ltd. (Law Firm Chungcheong, Attorney Choi Byung-su, Counsel for the defendant-appellant)

Seoul Central District Court Decision 2010Gahap118564 Decided May 26, 2011

December 27, 2011

1. All appeals filed by the plaintiffs are dismissed.

2. The costs of appeal are assessed against the Plaintiffs.

The judgment of the court of first instance shall be revoked. The defendant shall pay to the plaintiff 1 208,50,000 won and 200,000,000 won among them, 6% per annum from October 9, 2009 to the service date of a duplicate of the complaint of this case; 20% per annum from the next day to the day of complete payment; 8,500,000 won per annum from the next day to the day of complete payment; and 20% per annum from the next day to the day of complete payment; and 50,000 won per annum from November 24, 2010 to March 24, 204 to the day of complete payment; and 104,60,000 won per annum from the next day to March 24, 204 to the day of complete payment; and 6% per annum from the next day to the day of complete payment.

1. Conclusion of the instant insurance contract, the unpaid premiums, and the occurrence of the instant accident

On April 19, 2008, Plaintiff 2 entered into an insurance contract with the Defendant and Plaintiff 2 as the insured (hereinafter “instant insurance contract”). Plaintiff 2 designated Plaintiff 1, the mother, and Plaintiff 2, the “in the event of death” as the beneficiary of the insurance, and “in the event of hospitalization or injury” as the beneficiary of the insurance.

The content of the instant insurance contract is as follows:

Where the insured status is at least 80% of the total disability payment rate of 2-accidents entered into an insurance contract (per won) for the reasons for the payment of insurance premium (per KRW 5,000) contained in the main sentence, and the insured status is at least 80% of the total disability payment rate, the insured status 5,000 and less than 35,000 and less than 80% of the disability payment under the special agreement for 2-accidents x 10% of the disability payment rate x 35,000 family income special agreement for 5,000 x 16,500 of the disability payment rate x 80,000, 10% of the insurance coverage amount per month is at least 80% of the disability payment rate, 5,000 regular special agreement for 5,000,1000, 10% of the total disability payment rate of at least 80% of the total disability payment rate of the insured status, 3,0006,60 and 17.

At the time of the conclusion of the instant insurance contract, Plaintiff 2 paid the premium by automatic transfer method on April 1, 2008 and paid the premium on May 2008. However, on June 2008, Plaintiff 2 did not transfer the premium to Plaintiff 2 to the balance shortage in the Plaintiff 2’s account. Thereafter, Plaintiff 2 asked the Defendant Company for the cancellation of the instant insurance contract by phoneing to the Defendant Company on July 1, 2008. The employees of the Defendant Company asked for the cancellation of the instant insurance contract by telephone, and provided that “only telephone is difficult to cancel, but if the premium is not paid by July 31, 2008, the guarantee under the insurance contract shall be interrupted” from August 1, 2008, and Plaintiff 2 applied for the suspension of automatic transfer.

On July 7, 2008, the Defendant sent to Plaintiff 2 a notice to the effect that “if the insurance contract is terminated by July 31, 2008, without paying the premium, the insurance contract shall be terminated by the date of August 1, 2008 (hereinafter “the first notice”). Plaintiff 2 did not pay the premium on July 31, 2008 after the lapse of July 31, 2008. The Defendant sent the notice to Plaintiff 2 on August 7, 2008, that “if Plaintiff 2 fails to receive the first notice, the insurance contract may be maintained by paying the premium in arrears within 15 days from the date of the receipt of the first notice, by means of a registered mail (hereinafter “the second notice”). The Defendant did not pay the premium to Plaintiff 2 on August 28, 2008.”

Plaintiff 2, while driving Otoba on the road around September 13, 2008, was affected by an accident of collision with the vehicle with the central line (hereinafter “instant accident”). After being treated at a hospital after being treated at a hospital, the Plaintiff 2 suffered a complete paralysis, urology, urine disorder, and spine brate with the instant insurance contract on the ground that the instant insurance contract was invalidated on August 1, 2008, and the instant accident did not constitute an accident during the insurance period. Plaintiff 2 rejected the payment of insurance money to the Defendant on October 9, 2009 after the instant accident. However, the Defendant rejected the instant insurance contract on the ground that the instant accident does not constitute an accident during the insurance period.

[Reasons for Recognition] Facts without dispute, Gap 1 to 10 evidence, Eul 1 to 6 evidence (including paper numbers), the purport of the whole pleadings

2. The parties' assertion

A. The plaintiffs' claims

Plaintiff 2 sought the method of cancelling the contract in telephone call on July 1, 2008 with Defendant Company employees and did not terminate the insurance contract of this case. The Defendant’s first highest notice was not reached with Plaintiff 2, and the second highest notice that reached Plaintiff 2 cannot be deemed as indicating the Defendant’s intention of termination. Moreover, the insurance contract of this case constitutes “insurance for another person” under Article 639 Section 1 of the Commercial Act by designating the beneficiary as Plaintiff 1 at the time of the insured’s death, and constitutes “insurance for another person” under Article 650 Section 3 of the Commercial Act. Thus, the Defendant did not demand the payment of the insurance premium to Plaintiff 1 even if the contract can be terminated pursuant to Article 650 Section 3 of the Commercial Act. Therefore, the insurance contract of this case remains valid until the time of the accident of this case, and it is apparent that the accident of this case constitutes an accident during the insurance period, and that Plaintiff 2, the insured of this case’s insurance contract of this case, was in an obstacle to at least 80% disability payment rate.

In the instant insurance contract, in addition to the case of the death of the insured as well as in the case of the occurrence of a state of disability with at least 80% of the disability payment rate, the full amount of the insurance premium, which is the same amount as the case of the death, is required to be paid by the Defendant in the product description (Evidence No. 5). In addition, Article 37 of the Clause of the instant insurance contract provides that in the event that the policyholder does not designate the beneficiary, the insured is paid with the disability payment rate of at least 80%, and the insured is paid with the insured’s heir if the insured dies, and that in the event that the insured is a state of disability with at least 80%, the insured is paid with the benefit payment rate of at least 80%. This purport is that in the event that the insured designates the beneficiary, all the designated beneficiary is paid with the benefit payment rate of at least 80%, since the concept of “Death” of the instant insurance contract is included in the disability payment rate.

Therefore, since the Plaintiffs are entitled to receive the following insurance proceeds as the beneficiary of the instant insurance contract, the Plaintiffs seek payment of the amount stated in the claims to the Defendant as the insurance proceeds and delay damages under the instant insurance contract.

① Plaintiff 1: Insurance proceeds under a prime contract + KRW 50 million + Insurance proceeds under a special agreement for family import + KRW 8.5 million (the sum of KRW 500,000 per month from June 24, 2009 to October 24, 2010) and KRW 500,000 per month from November 24, 2010 to March 24, 2042 from March 24, 2042 between Plaintiff 2’s insurance age from November 24, 201 to 60 years of age; + KRW 50,000 insurance proceeds under a regular special agreement + KRW 10,000 insurance proceeds under a special agreement for disaster death.

② Plaintiff 2: Insurance money of 100 million won according to a special contract for accident injury + insurance money of 3.6 million won according to a special contract for hospitalization + insurance money of 1 million won according to a special contract for surgery

B. Defendant’s assertion

In the instant insurance contract, the special agreement for hospitalization, and the special agreement for surgery are “insurance for one’s own interest” with only the Plaintiff 2 as the beneficiary. In addition, among the instant insurance contract, the main contract, family import special agreement, regular special agreement, and special agreement for accident death designate the beneficiary at the time of death as the Plaintiff 1 and “insurance for another’s interest.” However, the occurrence of disability at a rate of 80% or more cannot be the same as the death, and the Plaintiff 1 is the beneficiary only at the time of death, and the main beneficiary is Plaintiff 2.

Plaintiff 2 may terminate the instant insurance contract at any time prior to the occurrence of an insured incident under Article 649(1) of the Commercial Act. On July 1, 2008, Plaintiff 2 terminated the instant insurance contract at telephone conversations. Moreover, Plaintiff 2 was informed on the termination of the insurance contract if the insurance premium is not paid by July 31, 2008 from the aforementioned telephone conversations, and did not pay the insurance premium even after being given the same guidance. Thus, the agreement between Plaintiff 2 and the Defendant was concluded to terminate the instant insurance contract as of August 1, 2008. In addition, the Defendant should not only cancel the instant insurance contract through Plaintiff 2’s first and second peremptory notices according to the unpaid insurance premium, but also even after Plaintiff 2’s occurrence of an insured incident under Article 655 of the Commercial Act. Thus, Plaintiff 2’s termination of the instant insurance contract by serving the pertinent legal brief on November 7, 2011.

Meanwhile, even if the main contract of this case, family import special agreement, regular special agreement, and accident death special agreement of this case have the nature of “insurance for others”, the proviso of Article 649(1) or Article 650(3) of the Commercial Act can only be applied to only the case of “insurance for others”. Since the main beneficiary of the above special agreement is Plaintiff 2, it does not require Plaintiff 2’s consent, etc. in cancelling the above special agreement, or the defendant’s termination of the said special agreement does not require the highest procedure against Plaintiff 1.

Ultimately, since the insurance contract of this case was lawfully terminated, the defendant is not liable to pay insurance money for the accident of this case after the termination of the insurance contract of this case.

3. Determination

A. The nature of the instant insurance contract

The instant insurance contract consists of nine main contract and nine special agreements. These special agreements are concluded in addition to the main contract with the policyholder's subscription and the consent of the insurance company when concluding the main contract (Article 1 of the terms and conditions of each special agreement). In addition, the policyholder may reduce the purchase amount of insurance for all kinds of special agreements, separate from the main contract, and at any time terminate only all kinds of special agreements (Articles 2 through 5 of the terms and conditions of each special agreement). In addition, with respect to all kinds of special agreements, the premium shall be paid separately from the main contract, and the insurance premium payment period and the insurance premium shall be determined differently. Accordingly, different insurance organizations are different insurance contracts (see Supreme Court Decision 2008Da81633, May 28, 2009).

Therefore, whether the "insurance for another person" under Articles 639 and 650 (3) of the Commercial Act is "insurance for another person" should be separately determined according to the main contract and each special agreement. Among the insurance contract of this case, the special agreement for accident injury, special agreement for hospitalization, special agreement for operation, cancer special agreement, CI (Class IV) special agreement is "insurance for one person's own interest" with only the plaintiff 2 as the beneficiary, and the main contract, family import special agreement, regular special agreement, regular special agreement, special agreement for accident death is "insurance for one person's own interest" in that the beneficiary of the "in the event of death" designates the beneficiary of the "in the event of death" as the plaintiff 2, and the nature of "life insurance for another person" is also different in that the beneficiary of

B. Determination on Plaintiff 2’s claim

On July 1, 2008, Plaintiff 2 applied for the suspension of automatic transfer of insurance premiums in the currency with Defendant Company’s employees, and received notification from Defendant Company’s employees to suspend the application of the insurance after July 31, 2008, where the payment of insurance premiums is not made until July 31, 2008, it is difficult to readily conclude that Plaintiff 2 notified the termination of the insurance contract of this case or agreed with the Defendant to terminate the insurance contract of this case.

With respect to the Defendant’s notice of termination, Plaintiff 2 seeks payment of insurance money according to the disaster injury special agreement, hospitalization special agreement, and special agreement for surgery among the instant insurance contract. Since all of the said special agreement does not constitute “insurance for others”, it is not problematic whether the Defendant’s notice of termination regarding the said special agreement is given to Plaintiff 1.

Article 14(1) of the Terms and Conditions of the Insurance Contract of this case provides that "if the relevant monthly premium is not paid by the payment date, by the end of the following month the contract shall be terminated on the following day, and if the premium is not paid by the payment date, by the end of the following month, the contract shall be terminated on the following day after the expiration of the payment period," which is effective as it does not put any disadvantage to policyholders (see Supreme Court Decision 2001Da7059, 70566, Feb. 5, 2002, etc.). Thus, it is valid that the notice of termination on the condition of suspension of payment under the terms and conditions of the highest payment period is valid as it does not put the policyholder at a disadvantage (see, e.g., Supreme Court Decision 2001Da7059, 70566, Feb. 6, 2008).

Even if the plaintiff 2 failed to receive the first highest notice, it can be deemed that the plaintiff 2 expressed his intention not to pay any premium at least at least at the time during telephone conversations on July 1, 2008, and that the plaintiff 2 received the second highest notice on August 8, 2008 and received the premium again by receiving the second highest notice. Since the insurance contract of this case was not paid at the latest by 15 days after the date of receipt of the second highest notice, it shall be deemed that the insurance contract of this case was legally terminated on August 24, 2008 after the expiration of 15 days from the date of receipt of the second highest notice.

Therefore, the above special agreement that Plaintiff 2 seeks insurance money was terminated before the occurrence of the instant accident, and thus, Plaintiff 2’s claim is without merit.

C. Determination on Plaintiff 1’s claim

The main contract, family import special agreement, regular special agreement, and accident death special agreement, which claims the payment of insurance money by Plaintiff 1, also designates the beneficiary of “the time of hospitalization or injury” as Plaintiff 2 as the policyholder and designates the beneficiary of “the time of death” as Plaintiff 1, and also includes both “insurance for himself/herself” and “life insurance for another person”. Thus, in order for the insurer to cancel the insurance contract on the ground of unpaid insurance premium, the insurer must demand not only Plaintiff 2, the beneficiary of “the time of hospitalization or injury” but also Plaintiff 1, the beneficiary of “the time of death” under Article 650(3) of the Commercial Act, and the termination of the insurance contract without such demand is unlawful.

However, in the main contract and the above special agreement, there is no difference in the insurance proceeds in the case where the insured dies and where a state of disability higher than 80% has occurred to the insured, and it cannot be deemed that the concept of disability payment exceeding 80% of the disability payment rate is included in the concept of “Death” of the insurance contract of this case on the ground that the defendant provided the insured with a product description as “Death Insurance Money.” In addition, Article 37 of the Clause of the insurance contract of this case provides that where the insured did not designate a beneficiary, the insured is paid with the benefit and the insured is paid with the benefit of at least 80%, and it does not purport to confirm the principle that the heir is paid with the benefit of the insured if the insured dies, and even if the insured is a state of disability higher than 80% in the case of the death of the insured, the insured does not purport to pay the “Death Insurance Money” to the beneficiary.

Ultimately, Plaintiff 1 was designated as a beneficiary of “the time of death” in the main contract, family import special agreement, regular special agreement, and accident death special agreement of this case, and Plaintiff 2 did not result in Plaintiff 1’s death. As such, Plaintiff 1 does not constitute a beneficiary entitled to claim insurance proceeds of the main contract and the said special agreement due to the accident of this case. Accordingly, Plaintiff 1’s claim is without merit.

4. Conclusion

Therefore, all of the plaintiffs' claims are dismissed, and the judgment of the court of first instance is partially inappropriate, but it is just to conclude this conclusion, and therefore all of the plaintiffs' appeals are dismissed.

[Attachment] Relevant Acts and subordinate statutes and terms: omitted

Judges Lee Jae-won (Presiding Judge)

Note 1) Relevant statutes and the terms and conditions of the instant insurance contract are as shown in the attached Form.