In the case of Fidelity Mutual Life Association v. Mettler, 1901, the U.S Supreme Court was tasked with deciding whether a life insurance policy could be considered property in bankruptcy proceedings. The court ruled that an unmatured life insurance policy did not constitute property under the Bankruptcy Act of 1898 and therefore could not be claimed by creditors in a bankruptcy proceeding. This decision was based on their interpretation that such policies do not have tangible value until they mature or are surrendered for cash value to the insurer, thus should not be treated as assets available to satisfy debts during insolvency. Consequently, this ruling provided significant protection for holders of life insurance policies who find themselves facing bankruptcy.

The dissenting opinion in the case of Fidelity Mutual Life Association v. Mettler argued that the majority's decision was a departure from established principles governing insurance contracts. The dissent contended that an insurer should not be allowed to avoid its obligations under a policy due to misrepresentations made by the insured, unless those misrepresentations were material and fraudulent. In this case, it was believed that there had been no evidence presented showing any intent on part of Mr. Mettler to deceive or defraud Fidelity Mutual Life Association when he applied for life insurance coverage; nor did his statements materially affect either acceptance of risk or hazard assumed by insurer. Therefore, according to this view, it would have been unjust for the company to evade payment after accepting premiums based on such non-fraudulent representations.