In the case of New York Life Insurance Company v. Dunlevy, 1915, the U.S. Supreme Court ruled in favor of New York Life Insurance Company. The dispute arose when Mr. Dunlevy's life insurance policy was forfeited due to non-payment of premiums after he had become insane and incapable of managing his affairs or understanding his obligations under the policy contract. His guardian later attempted to reinstate it by offering payment for back premiums but this was rejected by the company on grounds that reinstatement required evidence showing continued good health which could not be provided as Mr.Dunlevy had passed away in between. The court held that an insurer is not obligated to accept late premium payments and reinstate a lapsed policy if conditions for reinstatement are not met - one being proof of insured's good health at time of application for reinstatement, even if lapse occurred during period when insured became mentally incapacitated without any appointed legal representative who could have taken care about timely premium payments.

In the dissenting opinion for New York Life Insurance Company v. Dunlevy, it was argued that the majority's decision to uphold a lower court ruling in favor of Mr. Dunlevy was incorrect because it failed to consider important aspects of contract law and insurance policy provisions. The dissenting justices believed that when Mr. Dunlevy stopped paying premiums on his life insurance policy, he effectively terminated the contract with New York Life Insurance Company according to its terms and conditions. They contended that any subsequent reinstatement of this policy should have required mutual consent from both parties involved - not just unilateral action by Mr. Dunlevy or an automatic provision within state law as interpreted by the majority opinion.