In a non-ERISA case, Mrs. Pham applied for life insurance coverage of $600,000, gave her agent a check to cover the first premium, and received a Conditional Receipt, which provided temporary coverage as of the Effective Date, as long as she met all four Conditions to Conditional Coverage. A month later, Transamerica informed Bich that she could only be insured at the lesser amount of $525,114. She signed a supplemental illustration reflecting that lesser amount. The next month, Transamerica notified Bich’s agent that it had approved her application for the lesser coverage amount, but then she was tragically killed before the Policy was delivered to her.

Applying Texas Law, the District Court granted summary judgment in favor of the insurance company, but the U.S. Fifth Circuit reversed. As summarized:

“The Conditional Receipt defined the Effective Date as the later of: ‘the date of completing all parts of the application (including medical questions), the date of the last medical examination, tests, and other screenings required by the Company, if any, or the date requested in the application.’ Plaintiffs contend that Bich’s signing of the numeric summary constituted an amendment to and, thus, a ‘part of the application.’ Thus, according to Plaintiffs, Bich did not ‘complete all parts of the application’ until February 26, 2018, when she signed the numeric summary and accepted the lower coverage amount. On that date, she was insurable ‘in the lower amount … applied for.’ Meanwhile, Transamerica asserts that Bich’s application was not amended. Instead, Bich ‘completed all parts of the application’ on January 29, 2018, when she submitted her initial application. Thus, according to Transamerica, the Effective Date of the Conditional Receipt was February 6, 2018, the date that Bich completed the required medical examinations. On that date, Bich was not insurable in the coverage amount she had applied for — $600,000.”

The Court of Appeal found that Plaintiffs presented considerable evidence raising, at a minimum, a genuine dispute of fact as to whether there was a meeting of the minds to amend the application: “First, they point to a provision in the Policy which indicates that any applications and amendments are part of a single contract for insurance. In addition, two separate notices sent to Bich – the first stating that the application did not meet the premium-to-income underwriting guidelines and the second approving the application at the lower coverage amount – referenced the same application number…. Second, Plaintiffs argue that the Amendment of Application, which acknowledged the reduction of the coverage amount and was attached to the Policy delivered after Bich’s death, evinced a previous ‘meeting of the minds’ to amend the application. Finally, Plaintiffs argue that Transamerica’s compliance with the requirement that an insurer send an illustration to be signed and dated by an insured if a policy is to be issued other than as initially applied for, and Bich’s compliance in signing the illustration, provides further evidence that the application was amended.

“Other evidence in the record also supports Plaintiffs’ contention. First, the Amendment of Application document, which was attached to the Policy when it was sent to Bich in late March 2018 stated, ‘The undersigned agrees that these changes shall be an amendment to and form a part of the original application….’ Second, the application itself states that ‘this application shall consist of Part 1, Part 2, and any required application supplement(s)/amendment(s)….’ Finally, it appears that decisionmakers at Transamerica believed that Bich’s application had been amended by Bich’s signing of the numeric summary; per one company official, as of at least March 8, Transamerica understood Bich’s application to be one for $525,114 in coverage.”


Pham v. TransAmerica Premier Life Ins. Co., No.21-10028, 2021 WL 5861173 (5th Cir. Dec. 10, 2021).