In the case of New York Life Insurance Company v. Head in 1913, the U.S Supreme Court was tasked with deciding whether a life insurance policy could be forfeited for non-payment of premiums if the insured person is mentally incapacitated. The court ruled that an insurer cannot declare a policy void due to nonpayment when it has knowledge that the insured is insane and therefore incapable of managing their affairs or making payments. In this particular case, Mr. Head had been declared insane before his premium came due and he was unable to make payment as required by his contract with New York Life Insurance Company. The company's attempt to cancel his policy on these grounds was deemed unlawful by the court because they were aware of Mr.Head's condition at time payment became overdue.

The dissenting opinion in the case of New York Life Insurance Company v. Head argued that the majority's decision to allow Mrs. Head to recover insurance money was incorrect because it violated a fundamental principle of contract law: that parties must be held accountable for their agreements. The dissent emphasized that Mr. Head had knowingly and voluntarily entered into an agreement with the insurance company, which clearly stated that his policy would become void if he committed suicide within two years from its date, regardless of whether he was sane or insane at the time. Therefore, when Mr.Head took his own life during this period (even though evidence suggested he may have been mentally ill), according to this contract clause, no payment should be due under any circumstances as per agreed terms between both parties involved in signing the contract initially.