In the case of Woodworth v. Northwestern Mutual Life Insurance Company, 1901, the U.S Supreme Court dealt with a dispute over life insurance policy benefits. The plaintiff, Mrs. Woodworth, was seeking to recover on her late husband's life insurance policy from Northwestern Mutual Life Insurance Company after he committed suicide while allegedly insane. The insurer denied payment based on a clause in the contract that excluded coverage for death by suicide "whether sane or insane." However, Mrs. Woodworth argued that this exclusion was void under Michigan law which prohibited such clauses if the insured person had been insane at the time of committing suicide. The court ruled in favor of Northwestern Mutual Life Insurance Company stating that although Michigan law did indeed prohibit certain types of exclusions in life insurance policies related to suicides during periods of insanity; it only applied when companies were incorporating into their contracts provisions not allowed by state laws and regulations governing them specifically as insurers within its jurisdiction - something which wasn't applicable here since Northwestern is an out-of-state company doing business nationwide including Michigan but incorporated elsewhere (Wisconsin). Therefore they weren't subject to these specific state restrictions and could legally deny claims based on their own contractual terms agreed upon with Mr.Woodworth.

In the dissenting opinion for Woodworth v. Northwestern Mutual Life Insurance Company, Justice Harlan argued that the majority's decision was a departure from established principles of contract law and insurance policy interpretation. He contended that an insurer should not be allowed to escape liability on a life insurance policy due to minor inaccuracies in the insured's application unless those inaccuracies materially affected either the acceptance of risk or hazard assumed by the insurer. In this case, he believed there was no evidence suggesting that any misstatements made by Mr. Woodworth had such material effect; therefore, they should not have been grounds for voiding his life insurance coverage posthumously. Furthermore, Justice Harlan criticized what he saw as an unfair burden placed on policyholders to remember and accurately report every detail about their health history under penalty of losing their coverage after death when it would be too late for them to correct any errors or omissions.