39 T.C. 466">*467 Respondent determined a deficiency in estate tax in 1962 U.S. Tax Ct. LEXIS 18">*19 the amount of $ 17,298.10.

The question for decision is whether respondent erred in including in the gross estate of Marshal L. Noel the amount of $ 125,000, which represented the proceeds of two policies of air travel accident insurance paid to his wife, the beneficiary named in the policies, after his death in an airplane accident.

FINDINGS OF FACT.

Some of the facts have been stipulated, and, as stipulated, are incorporated herein by reference.

Marshal L. Noel, the decedent, died on June 20, 1956, when the airplane in which he was a passenger crashed into the Atlantic Ocean. The estate tax return was filed with the district director of internal revenue for the district of Newark, New Jersey.

The decedent was 49 years old at his death and a resident of Ridgewood, New Jersey. He was employed in New York City at substantial salaries by Frantz Tractor, Inc., and Equipment Investors, Inc. He was owner of Noel Company, a business in Bay City, Texas, that dealt in farm equipment and did land clearing on a contract basis. He was also vice president and part owner of a Venezuelan company, Maquinarias Bolivar, that sold heavy road building and mining machinery. He frequently made business1962 U.S. Tax Ct. LEXIS 18">*20 trips to Venezuela. It was on such a trip that the airplane accident occurred which caused his death.

On the evening of June 19, 1956, decedent's wife, Ruth M. Noel (hereinafter sometimes referred to as Ruth), drove her husband by automobile from their home in Ridgewood, New Jersey, to the New York International Airport (known as Idlewild) in New York, New York, where he was to board an airplane bound for Venezuela. At the airport, after purchasing his airplane ticket, decedent applied in writing for two policies of air travel accident insurance, each in the principal sum of $ 62,500, and each naming him as the person insured, at a booth maintained for the sale of such policies by Airport Sales Corporation, a sales agent. Decedent made separate written applications for each policy: One, for a policy in which Continental Casualty Company (hereinafter referred to as Continental) was the insurer; the other, for a policy in which the Fidelity and Casualty Company of New York (hereinafter referred to as Fidelity) was the insurer.

39 T.C. 466">*468 The last line of the application form for the Continental policy contained the printed words: "Signature of Applicant -- (Applicant must sign his1962 U.S. Tax Ct. LEXIS 18">*21 or her name)." Decedent signed his name on this line.

The application for the Fidelity policy contained the following printed statement immediately above the lines to be filled in by the applicant:

I hereby apply to Company named below for Scheduled Air Carrier Trip (Airline Trip) insurance to insure me on one airline trip as follows:

The first line of this application contained the printed words: "Name of applicant (Please Print)." Decedent's name is printed by hand on this line. The last line of this application contained the printed words: "Personal Signature of Applicant." Decedent signed his name on this line.

Both applications named Ruth as beneficiary and stated that the trip to be covered by the insurance was a round trip flight from New York, New York, to Puerto Ordaz, Venezuela. The premium paid for each policy was $ 2.50. Ruth is the sole beneficiary of the decedent's estate.

After the applications were signed by decedent he gave them to the sales clerk who validated them. Upon decedent's instructions the clerk handed the policies to Ruth. She kept them in her custody until after her husband's death.

Each policy provided for payments by the insurer in specified1962 U.S. Tax Ct. LEXIS 18">*22 amounts in respect of certain bodily injuries sustained by the insured as a result of an accident while a passenger on his round trip (either to or from Venezuela), and each policy also provided for payment of the principal sum ($ 62,500) in the event of loss of life in such accident.

Each policy contained the following provision entitled "Payment of Claims":

Indemnity for loss of life will be payable in accordance with the beneficiary designation and the provisions respecting such payment which may be prescribed herein and effective at the time of payment. If no such designation or provision is then effective, such indemnity shall be payable to the estate of the Insured. Any other accrued indemnities unpaid at the Insured's death may, at the option of the Company, be paid either to such beneficiary or to such estate. All other indemnities will be payable to the Insured.

Each policy contained the following provisions:

POLICY PROVISIONS. ENTIRE CONTRACT; CHANGES: This policy, including the endorsements and the attached papers, if any, constitutes the entire contract of insurance. No change in this policy shall be valid until approved by an executive officer of the Company and 1962 U.S. Tax Ct. LEXIS 18">*23 unless such approval be endorsed hereon or attached hereto. No agent has authority to change this policy or to waive any of its provisions.

* * * *

39 T.C. 466">*469 CHANGE OF BENEFICIARY: The right to change of beneficiary is reserved to the insured and the consent of the beneficiary or beneficiaries shall not be requisite to surrender or assignment of this policy or to any change of beneficiary or beneficiaries, or to any other changes in this policy.

* * * *

CONFORMITY WITH STATE STATUTES: Any Provision of this policy which, on its effective date, is in conflict with the statutes of the state in which the insured resides on such date is hereby amended to conform to the minimum requirements of such statutes.

The Continental policy contained the following provision:

This policy takes effect on the inception date and hour stated in the Schedule and terminates upon completion of the one way flight or return flight described in the Schedule or twelve months after said inception date and hour, whichever occurs first, Standard Time at place of issue as to each date.

The Fidelity policy contained the following provision:

5. POLICY TERM. This insurance shall commence on the day and hour shown 1962 U.S. Tax Ct. LEXIS 18">*24 above and shall terminate either upon completion of the above described airline trip or upon expiration of or surrender for refund or credit of, the transportation ticket hereinbefore referred to, but in no event shall this insurance extend beyond a period of twelve months.

The decedent was not asked whether he wished to reserve the right to change the beneficiary, nor was there any procedure available at the insurance booth to change any provision of the policies. The clerk at the booth was not authorized to vary any of the terms of the policies.

After the purchase of the two insurance policies in question the decedent boarded an airplane bound for Caracas, Venezuela, on a regular scheduled nonstop flight. The airplane left New York International Airport at 10:16 p.m., e.s.t., on June 19, 1956. Ruth returned to her home with the policies.

Less than 3 hours later, at 12:31 a.m., e.s.t., on June 20, 1956, the airplane in which decedent was a passenger crashed into the Atlantic Ocean. All on board were killed.

On June 25, 1956, Ruth signed claim forms for the insurance payable under the two policies. The forms were filled in for her by her attorneys.

Continental's claim form was1962 U.S. Tax Ct. LEXIS 18">*25 entitled "Affidavit of Claimant for Indemnity for Death Of." Question 2 asked: "Do you claim indemnity as beneficiary, executor, administrator, guardian, trustee or assignee?" This question was answered: "Beneficiary."

Fidelity's claim form was entitled "Statement of Beneficiary." At the bottom of this form, immediately beneath the line on which Ruth affixed her signature, is a line, close under which was printed: "Official capacity of Claimant if claim is made in such capacity." This line was left blank.

39 T.C. 466">*470 The principal sums of the two policies, totaling $ 125,000, were received in due course by Ruth from the insurance companies. This amount was not included in decedent's gross estate in the estate tax return filed by the executors of his will.

OPINION.

The $ 125,000 proceeds of the two insurance policies were paid over to the decedent's widow as a consequence of his death. The issue before us is whether such proceeds were includable in his gross estate under section 2042 of the Internal Revenue Code of 1954 which provides:

The value of the gross estate shall include the value of all property --

* * * *

(2) Receivable by other beneficiaries. -- To the extent of the amount1962 U.S. Tax Ct. LEXIS 18">*26 receivable by all other beneficiaries as insurance under policies on the life of the decedent with respect to which the decedent possessed at his death any of the incidents of ownership, exercisable either alone or in conjunction with any other person. * * *

1. At the outset we are met by petitioner's contention that the policies in question are not "policies on the life of the decedent" within the meaning of the statute. Petitioner argues that these policies are of the type often characterized as "accident insurance" or "flight insurance," and do not possess many of the features of what is commonly referred to as "life insurance." But the question raised is no longer open.

A similar contention was rejected some 33 years ago in Leopold Ackerman, 15 B.T.A. 635">15 B.T.A. 635, where it was held that amounts paid on account of accidental death under accident policies were amounts received "as insurance under policies taken out by the decedent upon his own life" within section 302(g) of the Revenue Act of 1924. The 1954 Code before us, although significantly different in other respects, is substantially identical in relation to the question whether the accident policies1962 U.S. Tax Ct. LEXIS 18">*27 constitute "insurance * * * on the life of the decedent." While recognizing that there are distinctions between life insurance and accident insurance, Ackerman nevertheless held that both may be "upon the life" of the insured. "In each case the risk assumed by the insurer is the loss of the insured's life, and the payment of the insurance money is contingent upon the loss of life." 15 B.T.A. 635">15 B.T.A. at 637. It is too late to raise the issue herein. The matter has been settled for too long a period to warrant reexamination. The statutory provisions involved are substantially identical as they relate to this question. We follow Ackerman here.

2. We pass therefore to consider whether the insurance proceeds are otherwise covered by section 2042(2). Our inquiry is simply whether 39 T.C. 466">*471 in relation to these policies, "the decedent possessed at his death any of the incidents of ownership, exercisable either alone or in conjunction with any other person." These provisions appeared for the first time in the 1954 Code. Whether the policies were "taken out" by the decedent or whether he paid the premiums are no longer the touchstone of taxability under the1962 U.S. Tax Ct. LEXIS 18">*28 new statute. Both the House and Senate Committee reports accompanying the new legislation contained the following statement:

This section revises existing law so that payment of premiums is no longer a factor in determining the taxability under this section of insurance proceeds. Insurance proceeds payable to the executor will continue to be taxed as under existing law. This section also requires the inclusion in the decedent's estate of insurance proceeds receivable by all other beneficiaries under a policy on the decedent's life with respect to which the decedent at death possessed any of the incidents of ownership exercisable either alone or in conjunction with any other person. * * *

H. Rept. No. 1337, 83d Cong., 2d Sess., p. A316; S. Rept. No. 1622, 83d Cong., 2d Sess., p. 472.

Did the decedent herein possess any of the incidents of ownership in the two policies before us? An examination of both policies requires an unequivocally affirmative answer. In each policy there is a paragraph entitled "Change of Beneficiary," in each of which the following appears:

Change of Beneficiary: The right to change of beneficiary is reserved to the Insured and the consent of the 1962 U.S. Tax Ct. LEXIS 18">*29 beneficiary or beneficiaries shall not be requisite to surrender or assignment of this policy or to any change of beneficiary or beneficiaries, or to any other changes in this policy.

It is argued by petitioner that the foregoing provision in the policies was merely "boiler plate," that the decedent did not desire any such right, and that he could not have obtained the policies without such provision. Granted that all this be true, it does not advance petitioner's position. Whether or not the right to change the beneficiary was "boiler plate," it was part of the contractual relationship with each insurance company and defined a legal right of the decedent. ¹ The right to change beneficiaries is one of the recognized "incidents of ownership," and accordingly the statute is applicable.

1962 U.S. Tax Ct. LEXIS 18">*30 Nor is a different result required by reason of the contention that the decedent's wife paid the premiums or that the policies were "assigned" to her. To be sure, we heard testimony that she paid the premiums, but we were not entirely convinced, and since taxability under the 1954 Code does not depend upon who paid the premiums, 39 T.C. 466">*472 we have not made any finding one way or the other as to this matter. ² To establish an assignment, the decedent's wife testified that the decedent told the clerk at the airport to give the policies to her, that they "now belonged" to her, and that "he had nothing more to do with them." We think that the delivery of the policies to her in such circumstances hardly establishes an assignment. It must be recalled that the policies contained provisions for insurance in respect of various bodily injuries short of death, and in such circumstances we are not convinced that petitioner intended to part with all rights in the policies. Rather, the testimony, even if strictly accurate, suggests merely that the decedent was indulging in a common practice of giving physical possession of the policies to the beneficiary so that, in the event of a fatal accident, 1962 U.S. Tax Ct. LEXIS 18">*31 she would be in a position to assert her rights under the policies. We do not find that by these oral statements, the decedent intended to make any irrevocable disposition of all his rights under the policies, ³1962 U.S. Tax Ct. LEXIS 18">*32 even assuming that he could legally do so in that manner. ⁴

Petitioner makes the further contention that the right to change the beneficiary was illusory since, as a practical matter, the decedent would have been unable to exercise that right during flight. The argument proves too much. The same would be true with respect to any policy of life insurance, and the mere fact that the insured at the moment of death might be temporarily incapacitated from exercising his rights has never been thought to vitiate the effect of such retained rights. Cf. Estate of Edward L. Hurd, 6 T.C. 819">6 T.C. 819,1962 U.S. Tax Ct. LEXIS 18">*33 affirmed 160 F.2d 610 (C.A. 1); Estate of Virginia II. West, 9 T.C. 736">9 T.C. 736, affirmed 173 F.2d 505 (C.A. 8); Estate of Charles S. Inman, 18 T.C. 522">18 T.C. 522, reversed on other grounds 203 F.2d 679 (C.A. 2); Rev. Rul. 61-123, 1961-2 C.B. 151. Moreover, it must be remembered that the policies were not limited to accident on a one-way voyage; they covered a round trip, and in the normal course the right to change the beneficiary would have been meaningful prior to commencement of the return trip. Of course, decedent's wife was in possession of the policies, and to the extent that her acquiescence may have been necessary in order to effectuate 39 T.C. 466">*473 a change of beneficiary ⁵ such circumstances would not render the statute inapplicable. For, the statute speaks in terms of incidents of ownership "exercisable either alone or in conjunction with any other person." And the unrestricted words "in conjunction with any other person" include persons having an adverse beneficial interest. Helvering v. City Bank Farmers Trust Co., 296 U.S. 85">296 U.S. 85;1962 U.S. Tax Ct. LEXIS 18">*34 Hall v. Wheeler, 174 F. Supp. 418">174 F. Supp. 418, 174 F. Supp. 418">421 (D. Maine).

We hold that the proceeds of the two policies in controversy are includable in the decedent's gross estate.

Decision will be entered under Rule 50.