In the case of Life Insurance Company v. Terry, the Supreme Court of the United States was asked to decide whether a life insurance policy was valid when the insured had made a false statement in the application. The insured, Terry, had applied for a life insurance policy with the Life Insurance Company and had made a false statement in the application regarding his age. The company had issued the policy and Terry had paid the premiums. When Terry died, the company refused to pay the death benefit, claiming that the policy was invalid due to the false statement. The Supreme Court held that the policy was valid and that the company was obligated to pay the death benefit. The Court reasoned that the false statement was not material to the risk assumed by the company and that the company had not been misled by the false statement. The Court also noted that the company had not taken any steps to verify the accuracy of the statement and that the company had accepted the premiums without any objection. The Court concluded that the company was obligated to pay the death benefit and that the false statement was not a valid defense to the company's obligation. The Court held that the company was estopped from denying the validity of the policy and that the company was liable for the death benefit.

In the case of Life Insurance Company v. Terry, Justice Field delivered a dissenting opinion in which he argued that the majority's decision was contrary to established precedent and would lead to unjust results. He noted that under existing law, an insurance company could not be held liable for death benefits if it had been misled by false statements made by the insured or his agent. In this case, however, the Court found that even though there were false representations made about Terry's health status when applying for life insurance coverage, those misrepresentations did not absolve Life Insurance Company from its obligation to pay out on the policy because they were unaware of them at the time of issuance. Justice Field disagreed with this conclusion and argued that any reasonable person should have known better than to rely solely on verbal assurances without making further inquiry into their accuracy before issuing a policy. Furthermore, he pointed out how such a ruling would encourage fraud and deception since insurers would no longer have any incentive to investigate potential risks prior to offering coverage; thus leading ultimately lead to unfair outcomes for both parties involved in these types of transactions.