Bacon v. Northwestern Mutual Life Insurance Company was a case heard by the United States Supreme Court in 1891. The case involved a dispute between the plaintiff, William Bacon, and the defendant, Northwestern Mutual Life Insurance Company. Bacon had purchased a life insurance policy from Northwestern Mutual in 1883. The policy provided that if Bacon died within two years of the policy's issuance, the company would pay the full amount of the policy to his estate. However, if Bacon died after two years, the company would pay only the amount of premiums paid plus interest. In 1885, Bacon died after two years had passed since the policy was issued. His estate sought to recover the full amount of the policy, arguing that the two-year limitation was void under the laws of the state of Wisconsin. The Supreme Court disagreed, ruling that the two-year limitation was valid and enforceable. The Court held that the policy was a contract between the parties, and that the two-year limitation was a valid and enforceable term of the contract. The Court also held that the limitation was not contrary to public policy, and that the parties were free to contract as they saw fit. As a result, the Court affirmed the lower court's ruling in favor of Northwestern Mutual.

In Bacon v. Northwestern Mutual Life Insurance Company, the Supreme Court was asked to decide whether a life insurance policy could be assigned as collateral for a loan without violating public policy. The majority opinion held that such an assignment did not violate public policy and was therefore valid. Justice Field dissented from this decision, arguing that allowing assignments of life insurance policies would lead to fraud and abuse by lenders who might take advantage of vulnerable borrowers in need of money. He argued that it would also encourage people to borrow more than they can afford since they will have access to funds secured by their life insurance policies which are intended for their beneficiaries upon death. Furthermore, he noted that if these assignments were allowed then there would be no way for courts or legislatures to regulate them due to the lack of uniformity among states' laws regarding such transactions. Ultimately, Justice Field concluded his dissent with the belief that allowing such assignments violated both state law and public policy because it encouraged reckless borrowing practices while simultaneously depriving individuals’ families from receiving benefits promised under their life insurance policies after death