Halberstam v. United States Life Insurance, 36 Misc. 3d 497

Policy issued Feb 25, 2005 for $5 million; Leo G. Family Trust as owner and beneficiary; Leo G. Family Trust trustee Aharon Rochman; insured Leo Goodstein; trust changed beneficiary Oct 2008 to MN Irrevocable Life Insurance Trust.
Leo Goodstein died Mar 18, 2009; MN Irrevocable Life Insurance Trust filed claim with US Life Insurance Co.
US Life investigated and alleged an imposter signed the application; purported blood/urine samples may have come from different individuals.
Policy contains incontestability clause: policy incontestable after two years from issue, subject to exceptions for fraud/misrepresentation.
Plaintiff seeks summary judgment asserting no evidence of fraud and that incontestability statute bars post-two-year challenges; defendant contends policy void ab initio for fraud and lack of insurable interest.
Court grants summary judgment for plaintiff, holding the trust is not a stranger to the policy and incontestability bars contest beyond two years; insurable interest issues are weighed against incontestability policy and legislature.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the incontestability clause bars post-two-year challenges.	MN Irrevocable Life argues statute precludes post-two-year contesting.	US Life contends fraud/impersonation justifies voiding or contesting the policy.	Yes; contest barred after two years absent a supported exception.
Whether the trust’s ownership/beneficiary status makes it a stranger to the contract.	Trust was purchaser/owner/beneficiary; not a stranger; entitled to policy benefits.	If not benign, imposter issue could render contract void.	Trust not a stranger; entitled to benefits and incontestability applies.
Whether lack of insurable interest voids the policy or is still contestable within two years.	Lack of insurable interest does not void under incontestability; contestable window governs.	Lack of consent/insurable interest could be grounds to challenge.	Insurable interest issue does not void the contract beyond two years under current doctrine.

New England Mut. Life Ins. Co. v Caruso, 73 N.Y.2d 74 (N.Y. 1989) (insurable interest and incontestability interplay; not void ab initio but contestable within two-year window)