Phyllis Dietrichson describes her imprisonment in an emotionless, boring marriage to her tight-fisted husband:

Phyllis: He has a lot on his mind. He doesn't seem to want to listen to anything except maybe a baseball game on the radio. Sometimes we sit here all evening and never say a word to each other.
Walter: Sounds pretty dull.
Phyllis: So I just sit and knit.
Walter: Is that what you married him for?
Phyllis: Maybe I like the way his thumbs hold up the wool.
Walter: Anytime his thumbs get tired. Only with me around, you wouldn't have to knit.
Phyllis: Wouldn't I?
Walter: You bet your life you wouldn't. (He sips from his iced tea glass) I wonder if a little rum would get this up on its feet.

Obviously an experienced predator and knowing of Neff's undisguised lustful interest in her, she inquires about buying an accident insurance policy for her husband - without him knowing about it, "without bothering him at all...he needn't know anything about it." Supposedly Mr. Dietrichson would be "superstitious about it" and would not order it himself. Walter reacts negatively, clearly thinking it's a set-up:

Phyllis: You see what I mean, Walter?
Walter: Sure. I've got good eyesight. You mean you want him to have the policy without him knowing it. And that means without the insurance company knowing that he doesn't know it. That's the setup, isn't it?
Phyllis: Is there anything wrong with it?
Walter: No, I think it's lovely. Then, if some dark wet night, that crown block did fall on him -
Phyllis: What crown block?
Walter: Only sometimes it can't quite make it on its own. It has to have a little help.
Phyllis: I don't know what you're talking about.
Walter: Of course, it doesn't have to be a crown block. It can be a car backing over him, or he could fall out of the upstairs window. Any little thing like that, just so it's a morgue job.
Phyllis: Are you crazy?
Walter: Not that crazy. Good-bye, Mrs. Dietrichson.

He is shocked and unsettled at her suggestion of accident insurance - and speculates about her concealed desire to liquidate her husband and collect the payoff. Neff prepares to leave, too astute (he believes) to be fooled by an insurance deal that may lead to murder. He condescends to her, calling her 'baby':

Walter: Look, baby. You can't get away with it. You want to knock him off, don't ya?
Phyllis: That's a horrible thing to say.
Walter: Whaddya think I was anyway? A guy that walks into a good-looking dame's front parlor and says, 'Good afternoon. I sell accident insurance on husbands. Have you got one that's been around too long? One you'd like to turn into a little hard cash? Just give me a smile and I'll help you collect?' Huh! Boy, what a dope you must think I am!
Phyllis: I think you're rotten.
Walter: I think you're swell. So long as I'm not your husband.
Phyllis: Get out of here.
Walter: You bet I'll get out of here, baby. I'll get out of here but quick.

Rejecting the whole idea (she "can't get away with it"), he promptly leaves. As he exits the house and walks to his car to drive away, he expresses his thoughts of clever omniscience - in voice-over:

So I let her have it, straight between the eyes. She didn't fool me for a minute, not this time. I knew I had ahold of a red hot poker, and the time to drop it was before it burned my hand off.

Neff buys a bottle of beer at a drive-in to wash away the "sour taste" of the iced tea, and then to a bowling alley at Third and Western to try to lose himself by rolling a few lines. Returning to his darkly-lit apartment from the rainy dark outdoors, he stands in the dark by the window and then paces in his living room - imagining a masochistic image of playing with the woman (a "red-hot poker"):

I was all twisted up inside and I was still holding on to that red-hot poker. And right then it came over me that I hadn't walked out on anything at all, that the hope was too strong, that this wasn't the end between her and me. It was only the beginning.

His attempt to walk out on her is futile when she stands in the doorway of his darkened apartment. As he expects, "as if it was the most natural thing in the world," at 8 pm his apartment bell rings and Phyllis appears in the moody light - on the pretense of returning his hat from earlier that afternoon - but she has nothing in her hands - and strolls in after asking: "Don't you want me to bring it in?" He instructs her to put the non-existent hat on the chair. [In his dark apartment's wall are small framed, hanging pictures of a non-gloved boxer.] Phyllis explains that she has located him from the phone book. When she peels off her coat, she is seen wearing a very tight, form-fitting white sweater designed to entice him. She tries to explain to him that she had no malicious intent and that he may have the wrong impression about her: "I must have said something that gave you a terribly wrong impression. You must never think anything like that about me, Walter."

She looks at him intensely and requests: "I want you to be nice to me, like the first time you came to the house." But Walter tells her: "It can't be like the first time. Something's happened." Although things have changed since their first meeting, she encourages what "has happened," explaining: "I know it has. It's happened to us." By the wet window pane, Phyllis relates more about the suffocating relationship she has in her marriage:

Phyllis: I feel as if he was watching me. Not that he cares, not anymore. But he keeps me on a leash so tight I can't breathe.
Walter: He's in Long Beach, isn't he? Relax.
Phyllis: Maybe I oughtn't to have come.
Walter: Maybe you oughtn't.
Phyllis: You want me to go?
Walter: If you want to.
Phyllis: Right now?
Walter: Sure. Right now.

But as she drifts away from him to leave, he grabs her by the wrist and kisses her, feverishly telling her:

Walter: I'm crazy about you, baby.
Phyllis: I'm crazy about you, Walter.
Walter: The perfume on your hair. What's the name of it?
Phyllis: I don't know. I bought it in Ensenada.
Walter: You ought to have some of that pink wine to go with it. The kind that bubbles. All I got is bourbon.
Phyllis: Bourbon is fine, Walter.

In the dark kitchen while preparing the drinks, Walter impresses her with the facts about two fraudulent accident insurance claims, both filed by wives against their deceased husbands. The second case, in which the wife claimed her husband was cleaning his gun and shot himself in the stomach, ended with a prison term for the wife: "All she collected was a three-to-ten stretch in Tehachapi." Phyllis responds: "Perhaps it was worth it to her."

Back in the living room with their drinks, Phyllis again explains about being trapped in a loveless marriage to her domineering and mean husband Dietrichson (his second marriage) and about his live-in daughter named Lola (Jean Heather) from his first marriage. She envies Walter's independence:

It sounds wonderful. Just strangers beside you. You don't know them and you don't hate them. You don't have to sit across the table and smile at him and that daughter of his every morning of your life...He thinks a lot more of her than he does of me.

Phyllis is unable to convince the hateful Mr. Dietrichson to grant her a divorce. She married him out of pity after the death of his first wife (who was sick for a long time), when she served as the wife's nurse:

Phyllis: When she died, he was terribly broken up. I-I pitied him so.
Neff: And now you hate him.
Phyllis: Yes, Walter. He's so mean to me. Every time I buy a dress or a pair of shoes, he yells his head off. He never lets me go anywhere. He keeps me shut up. He's always been mean to me. Even his life insurance all goes to that daughter of his. That Lola.
Walter: Nothing for you at all, huh?
Phyllis: No, and nothing is just what I'm worth to him.
Walter: So you lie awake in the dark and listen to him snore and get ideas.
Phyllis: Walter, I don't want to kill him. I never did. Not even when he gets drunk and slaps my face.
Walter: Only sometimes you wish he was dead.
Phyllis: Perhaps I do.
Walter: And you wish it was an accident and you had that policy for $50,000 dollars. Is that it?
Phyllis: Perhaps that too.

Phyllis imagines killing her husband in an enclosed garage by carbon monoxide poisoning. Although Neff is in the perfect position to plan and execute a fool-proof insurance fraud, he is worried about one potential problem in his office - their nemesis - the cunning, investigative Keyes who uses intuitive hunches to solve claims cases:

If you had that accident policy and tried to pull a monoxide job, we've got a guy in our office named Keyes. For him, a set-up like that would just be like a slice of rare roast beef. In three minutes, he'd know it wasn't an accident. In ten minutes, you'd be sitting under the hot lights. In a half hour, you'd be signing your name to a confession...They (the insurance company) know more tricks than a carload of monkeys. And if there's a death mixed up in it, you haven't got a prayer. They'll hang you just as sure as ten dimes will buy a dollar.

Phyllis cries about her predicament as he holds her on the sofa. He puts his arms around her and tells her: "And I don't want you to hang, baby. Stop thinking about it, will ya?"

Neff admits that he is taken by her teary-eyed seductiveness, as the scene dissolves back to Neff's office where he continues to dictate into the dictaphone for Keyes' benefit. In an important "roulette wheel" speech, Neff explains that because he has learned the mechanics of the insurance business so intimately, one of his motivations to attempt the perfect murder is to challenge and irreverently rebel against the system in order to beat it:

So we just sat there, and she started crying softly like the rain on the window. And we didn't say anything. Maybe she had stopped thinking about it, but I hadn't. I couldn't because it was all tied up with something I'd been thinking about for years. Since long before I ever ran into Phyllis Dietrichson. Because, you know how it is Keyes, in this business you can't sleep for trying to figure out all the tricks they could pull on you. You're like the guy behind the roulette wheel, watching the customers to make sure they don't crook the house. And then one night, you get to thinking how you could crook the house yourself. And do it smart. Because you've got that wheel right under your hands. You know every notch in it by heart. And you figure all you need is a plant out front, a shill to put down the bet. And suddenly the doorbell rings and the whole setup is right there in the room with ya. (pause) Look, Keyes, I'm not trying to whitewash myself. I fought it, only I guess I didn't fight it hard enough. The stakes were $50,000 dollars, but they were the life of a man too, a man who'd never done me any dirt except he was married to a woman he didn't care anything about. And I did.

The scene tracks/dissolves back to Walter's apartment, the same evening, where Neff reclines on the sofa smoking a cigarette, and Phyllis is fixing her makeup. [The viewer is drawn back into their murderous plot with this second dissolve. What has transpired between them during the dissolve is suggestively hinted at. She has definitely told him her guilty secret, and they have presumably had experienced sexual knowledge of each other.] Phyllis, who has been sitting next to him, gets up and puts on her coat to leave. When he doesn't answer her, absently lost in his own uncontrollable thoughts, she calls again: "Walter!" She expresses her disdain about returning to her husband. He has decided to join her in scheming to kill her husband and help her make it look like an accident - to collect on her husband's accident insurance policy:

Phyllis: I hate him. I loathe going back to him. You believe me, don't you, Walter?
Walter: Sure I believe you. (They kiss.)
Phyllis: I can't stand it anymore. What if they did hang me?
Walter: They're not going to hang you, baby.
Phyllis: It's better than going on this way.
Walter: They're not gonna hang you because you're gonna do it and I'm gonna help you.
Phyllis: Do you know what you're saying?
Walter: Sure I know what I'm saying. We're gonna do it and we're gonna do it right. And I'm the guy that knows how.

He tells her that they're going to do it with a brilliant, scheming plot. He grabs her tightly and digs his fingers into her arm. Neff expresses himself with a fierce determination in his voice, vowing that everything must be perfection "straight down the line":

There's not going to be any slip up. Nothing sloppy, nothing weak, it's gotta be perfect. (They kiss each other and then he leads her toward the door.) Call me tomorrow. But not from your house. From a booth. And watch your step every single minute. This has gotta be perfect, do ya understand? Straight down the line.

As she goes out the door, she repeats his words: "Straight down the line." He slowly walks across to his window, opens it wide, and stands there, listening to the sounds of her car start and then drive off into the rain. They plan to collect $100,000 in double indemnity insurance so they can run off together.

The voice-over narration dissolves back to the scene in Neff's office, as he describes into the dictaphone his newly-formed compulsion: "That was it, Keyes. The machinery had started to move and nothing could stop it." He also tells Keyes that he has anticipated the kinds of investigative questions the claims agent would inevitably ask:

I was trying to think with your brains, Keyes, 'cause I wanted all the answers ready for all the, all the questions you were gonna spring as soon as Dietrichson was dead.

Although there is danger in their plan, Neff meets a few nights later with Mr. Dietrichson to sign up for the auto insurance renewal. Neff feels "queer in the belly" that Dietrichson's daughter Lola serves as a witness, although she sits playing Chinese Checkers with Phyllis at a table on the other side of the room (in a mid-shot) and leaves before witnessing her father's signature. Before leaving, she vows (deceptively) to her irritated father that she is only going out to meet a girlfriend, and not to rendezvous with her unacceptable boyfriend (to her father) - a med-school drop-out.

Explaining to him that he must sign duplicate forms, Neff is able to have the distracted Dietrichson sign what he thinks is his renewal application for an auto insurance policy. Without his knowledge, he is easily duped - and actually signs, with his second signature, a $50,000 accident insurance policy with double indemnity provisions. At the moment he signs on the "bottom line," grumbling about "files, duplicates, triplicates," Walter's and Phyllis's eyes meet - she is positioned between them in the camera's framing. Outside the Dietrichson's front door, Phyllis whispers excitedly to Walter: "He signed it, didn't he?"

Walter explains that when her husband travels to Palo Alto, California at the end of the month for his Stanford University annual class reunion, he must not drive as usual, but take the train. A double-indemnity clause, typical in every accident policy and intended as "a come-on for the customers," means the company pays twice the settlement if the insured party is accidentally killed in a certain kind of accident - "the kind that almost never happen." Walter offers an example: "Like for instance, if a guy is killed on the train, they pay a hundred thousand instead of fifty thousand...We're hitting it for the limit, baby. That's why it's got to be the train." Phyllis incants agreement with the familiar phrase, making it appear that the plot is Walter's idea:

It'll be the train, Walter, just the way you want it. Straight down the line.

When Walter reaches his Dodge coupe parked outside the Dietrichson's garage, Lola surprises him when he looks in and sees her sitting in the front seat. She requests a ride [an ambiguously sexual invitation!] down the hill, down Vermont, although she is not planning to go roller skating with girl friend Anne Matthews as she earlier told her parents, but to see her penniless boyfriend Nino Zachetti (Byron Barr) on the sly. [Both Lola and Phyllis are engaged in clandestine relationships, with Neff and Zachetti, and both women are manipulative toward Neff]:

I'm having a very tough time at home. My father doesn't understand me and Phyllis hates me...That's why I have to lie sometimes...You won't tell on me, will you?...I guess my father thinks nobody's good enough for his daughter except maybe the guy that owns Standard Oil. I wish he'd see it my way. I can't give Nino up.

Lola's secret relationship with Zachetti, a twenty-five year old, tough-acting Italian who is considered "hotheaded," distracts Neff from his murder plan. Neff's attitude toward Lola is also paternalistic, making him a second "dead pigeon":

But right then, it gave me a nasty feeling to be thinking about them at all, with that briefcase right behind my head that had her father's signature in it and what that signature meant. It meant he was a dead pigeon. It was only a question of time, and not very much time at that.