In the case of New York Life Insurance Company v. Dodge, 1917, the U.S Supreme Court was tasked with deciding whether a life insurance policy could be assigned by an insured person without the insurer's consent. The court ruled in favor of New York Life Insurance Company stating that such assignments were permissible under law and did not require prior approval from insurers. This decision stemmed from a dispute where Mr. Dodge had taken out a life insurance policy on himself and later assigned it to his wife as part of their divorce settlement without informing or seeking permission from New York Life Insurance Company. After his death, when Mrs.Dodge claimed for benefits, the company refused payment arguing that they hadn't approved this assignment which led to litigation ending up at Supreme Court level.

In the dissenting opinion for New York Life Insurance Company v. Dodge, Justice Oliver Wendell Holmes Jr. argued that the majority's decision to allow a wife to recover insurance money from her husband's policy was incorrect because it violated principles of contract law. He contended that since the wife did not have an insurable interest in her husband at the time he took out his life insurance policy, she should not be entitled to receive any benefits after his death. According to Holmes, allowing such recovery would essentially permit wagering on human life and could lead to moral hazards like encouraging murder for financial gain. Furthermore, he asserted that if someone without an insurable interest is allowed recovery under a life insurance policy, then anyone could take out a policy on another person’s life and profit from their death - something which goes against public policy considerations.