Estate inclusion of life insurance policies denied, but premiums paid shortly before death remained deemed gifts.

The surrender value of children's deferred life insurance policies was not includible in the deceased's estate because the daughters had become absolute owners on attaining majority, and the deceased's rights had ceased during his lifetime. Section 15 did not apply since no beneficial interest accrued on death and no annuity or other interest was provided in a manner attracting that provision. The premium payments made within two years before death were, however, correctly treated as gifts deemed to pass on death under section 9, so only those premiums were includible.

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Issues: Whether the surrender value of the children's deferred life insurance policies was includible in the deceased's estate under section 15, or only the premium amounts paid within two years of death were includible as deemed gifts under section 9.

Analysis: The policies were taken by the deceased on the lives of his daughters, but the daughters attained majority long before the deceased's death and, upon doing so, became absolute owners of the policies. The deceased's rights and interests in the policies had ceased during his lifetime, and no beneficial interest accrued to the daughters by survivorship or otherwise on his death. Section 15 applies only where an annuity or other interest is purchased or provided by the deceased and a beneficial interest accrues on death; those conditions were absent here. The premium payments made by the deceased within two years before death were, however, properly treated as gifts deemed to pass on death under section 9.

Conclusion: The surrender value of the policies was not includible in the estate, and the inclusion of only the premium amounts paid within two years of death was upheld.

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