Life insurance
It is insurance on human lives and insurance appertaining thereto or connected therewith (Sec.
181, Insurance Code). It is made payable on the death
of the person, or on his surviving a specified period, or otherwise contingently on the continuance or cessation of life (Sec. 182, ibid).
NOTE: Every contract or undertaking for the payment of
annuities including contracts for the payment of lump sums under a retirement program where a life insurance company manages or acts as a trustee for such retirement program shall be considered a life insurance contract for purposes of the Insurance Code (Sec. 181, Insurance Code). Every contract or pledge for the payment of endowments or annuities shall also be considered a life insurance contract under the Insurance Code (Sec. 182, Insurance
Who may exercise any right under the policy
In the absence of a judicial guardian, the father, or in the latter’s absence or incapacity, the mother, of any minor, who is an insured or a beneficiary under a contract of life, health, or accident insurance, may exercise, in behalf of said minor, any right under the policy, without necessity of court authority or the giving of a bond, where the interest of the minor in the particular act involved does not exceed Five hundred thousand pesos (P500,000.00) or in such reasonable amount as may be determined by the Commissioner. Such right may include, but shall not be limited to, obtaining a policy loan, surrendering the policy, receiving the proceeds of the Policy, and giving the minor’s consent to any transaction on the minor’s consent to any transaction on the policy.
In the absence or in case of the incapacity of the father or mother, the grandparent, the eldest brother or sister at least eighteen (18) years of age, or any relative who has actual custody of the minor insured or beneficiary, shall act as a guardian without need of a court order or judicial appointment as such guardian, as long as such person is not otherwise disqualified or incapacitated. Payment made by the insurer pursuant to this section shall relieve such insurer of any liability under the contract (Sec. 182, Insurance
Code).”
Life insurance is also a contract of indemnity This is because of the following reasons:
1. The liability in life insurance is absolutely certain 2. Amount of life insurance generally is without
limit
3. The policy is a valued policy
4. There is no direct pecuniary loss required (De
Leon, 2010).
Kinds of life insurance policies
1. Ordinary life, general life or old line policy – Insured pays a premium every year until he dies. Cash surrender value after 3 years.
2. Limited payment – Insured pays premium for a limited period. If he dies within the period, his beneficiary is paid; if he outlives the period, he does not get anything.
3. Endowment – insured pays premium for specified period. If he outlives the period, the face value of the policy is paid to him; if not, his beneficiaries receive the benefit.
4. Term insurance – insured pays premium only once, and he is insured for a specified period. If he dies
within the period, his beneficiaries benefit. If he outlives the period, no person benefits from the insurance.
5. Industrial life – entitles the insured to pay
premiums weekly, or where premiums are payable monthly or oftener (Sundiang, 2014).
Contract of life annuity
It is a contract to pay the insured, or a named person or persons, a sum or sums periodically during life or certain period (Perez, 2006).
Measure of indemnity under a policy of insurance upon life or health
GR: The measure of indemnity under a policy of insurance upon life or health is the sum fixed in the policy.
XPN: The interest of a person insured is susceptible of exact pecuniary measurement (Sec. 186, Insurance
Code).
Liability of the insurer in case of suicide
The insurer shall be liable in case of suicide by the insured if:
1. The suicide is committed after the policy has been in force for a period of 2 years from the date of its issue or of its last reinstatement. 2. The suicide is committed within a shorter period
as provided in the policy.
3. The suicide is committed in the state of insanity regardless of the date of commission (Sec. 183,
ibid.)
Q: Sun Insurance Co. issued to Tan a life policy having this provision: “the company shall not be liable in respect of ‘bodily injury’ consequent upon the insured person who willfully exposes himself to needless peril except in an attempt to save human life". Tan designated his wife, Beverly as beneficiary. One evening, Tan, while playing with his hand gun, suddenly stood in front of his secretary and pointed the gun at her. Startled, she pushed the gun aside and said that it may be loaded. Thus, Tan, to assure her that it was not loaded, pointed it at his temple. The next moment, there was an explosion and Tan slumped to the floor lifeless.
Beverly, then claimed the proceeds from Sun Insurance, but the latter rejected her claim on the ground that the death of Tan was not accidental. Beverly sued the insurer. Will Beverly’s claim prosper?
A: Beverly can recover the proceeds of the policy from the insurer. The death of the insured was not due to suicide or willful exposure to needless peril which are excepted risks. The insured’s act was purely an act of negligence which is covered by the policy and for which the insured got the insurance for his protection. In fact, he removed the magazine from the gun and when he pointed the gun to his temple he did so because he thought that it was safe for him to do so. He did so to assure his sister that the gun was harmless. There is none in the policy that would relieve the insurer of liability for the death of the insured since the death was an accident (Sun
Insurance v CA, G.R. Nos. 79937-38, February 13, 1989).
Q: X, in January 30, 2009, or two (2) years before reaching the age of 65, insured his life for Php20Million. For reason unknown to his family, he took his own life two (2) days after his 65th birthday. The policy contains no excepted risk. Which statement is most accurate? (2012 Bar Question)
a. The insurer will be liable. b. The insurer will not be liable.
c. The state of sanity of the insured is relevant in cases of suicide in order to hold the insurer liable. d. The state of sanity of the insured is irrelevant in cases of suicide in order to hold the insurer liable. A: A. The insurer will be liable under Sec. 183 of the Insurance Code. The suicide is committed after the policy has been in force for a period of 2 years from the date of its issue.
Life insurance v. Fire /marine insurance
LIFE INSURANCE FIRE/MARINE INSURANCE