In the Equitable Life Assurance Society v. Clements case of 1890, the U.S Supreme Court ruled in favor of Equitable Life Assurance Society. The issue at hand was whether a life insurance policy could be considered an asset that creditors could claim against to settle debts after death. Mr. Clements had taken out a life insurance policy with Equitable and named his wife as beneficiary but died insolvent, owing significant debt to various parties who then sought payment from Mrs.Clements' inherited assets including the proceeds from her husband's life insurance policy. The court held that under Texas law, which protected certain property rights for women (including those related to their roles as wives and mothers), Mrs.Clements was entitled to receive all benefits from her late husband's life insurance policy free from any claims by his creditors. This ruling reinforced the principle that state laws can provide protections beyond federal bankruptcy laws when it comes to exempting certain types of property or assets from being used to pay off debts.

In the dissenting opinion for Equitable Life Assurance Society v. Clements, it was argued that the majority's decision to uphold a lower court ruling in favor of Clements contradicted established legal principles regarding insurance contracts. The dissent emphasized that an insurer has a right to rely on the truthfulness and completeness of information provided by an applicant when assessing risk and determining premium rates. In this case, Clements had failed to disclose pertinent health information during his application process with Equitable Life Assurance Society which would have significantly impacted their assessment of insurability risk. The dissenting justices believed that such non-disclosure constituted fraud or misrepresentation, thereby voiding any contractual obligations on part of the insurer towards payment upon death claim made by beneficiaries after policyholder’s demise due to undisclosed pre-existing condition(s). They contended that upholding such contract despite clear evidence of material concealment undermines trustworthiness essential for functioning insurance markets while unfairly burdening insurers who act in good faith based on incomplete or false data provided by applicants.