Did the conditional clause violate public policy?

On November 26, a Country Life Insurance agent went to the house of Donald and Anna Mae Anderson. He persuaded the Andersons to buy a life insurance policy and accepted a check for $1,600. He gave the Andersons a “conditional receipt for medical policy,” dated that day. The form stated that the Andersons would have a valid life insurance policy with Country Life, effective November 26, but only when all conditions were met. The most important of these conditions was that the Country Life home office accepts the Andersons as medical risks. The Andersons were pleased with the new policy and glad that it was effective that same day.
It was not. Donald Anderson died of a heart attack a few weeks later. Country Life declined the Andersons as medical risks and refused to issue a policy. Anna Mae Anderson sued. Country Life pointed out that medical approval was a condition precedent. In other words, the company argued that the policy would be effective as of November 26, but only if it later decided to make the policy effective. Based on this argument, the trial court gave summary judgment for Country Life. Ms. Anderson appealed, claiming that the conditional clause was a violation of public policy.