Gene Rose Canaya LlB 3-B

Chapter 13- LIFE INSURANCE

Life insurance- an insurance on human lives and insurance appertaining thereto or connected
therewith.
- payable on death of a person or on his surviving a specified period, or otherwise
contingently on the continuance of cessation of life
- it is a mutual agreement by which a party agrees to pay a given sum on the happening of
a particular event contingent on the duration of human life, in consideration of the
payment of a smaller sum immediately, or in periodical payments by the other party.

Kinds of life insurance policy

1. Ordinary life, general life or old line policy- insured pays a premium every year until he
dies. Surrender value after 3 years.
2. Limited payment- insured pays premium for a limited period. It is payable only at the
death of the insured.
3. Endowment- insured pays a premium for a specified period. If he outlives the period, the
face value of the policy is paid to him. In case of his death, it shall be payable to the
beneficiary designated.
4. Term insurance- the insurer promises to pay the fact amount of the policy to the
beneficiary if the insured dies within the specified period. The contract expires without
value if the insured survives the period. It may further classified into short term, long
term, renewable insurance, or convertible insurance
5. Industrial life- premium are payable either monthly or oftener, if the face amount of
insurance provided in any policy is not more than five hundred times that of the current
statutory minimum daily wage in the City of Manila

Annuity distinguished from Insurance

1. The person designated as the recipient is the person paying the money
2. Hazard of loss is no longer upon the company but upon the recipient who may die before
any benefits are received.
3. Gives protection to excessive longevity
4. There is a pooling of money
Minor as insured
Section 182 of Insurance Code provides that the following can exercise the rights of a minor
under a life insurance policy where he is an insured or beneficiary:
1. Father
2. In the absence or incapacity of No. 1, the mother
3. In the absence of No. 1 or No. 2, the following may exercise without need of court
appointment;
i. Grandparent
ii. Eldest brother or sister at least 18 years of age, or
iii. Any relative who has actual custody of the minor

Effect if the beneficiary will fully bring about the death of the insured
- The interest of the of a beneficiary in a life insurance policy shall be forfeited when the
beneficiary is the principal, accomplice, accessory in willfully bringing about the death of
the insured, in which event, the nearest relative of the insured shall receive the proceeds
of said insurance, if not otherwise disqualified.
Exception:
1. The beneficiary acted in self-defense
2. The insureds death was not intentionally caused
3. Insanity of the beneficiary at the time he killed the insured

Suicide Clause- the insurer is liable when:

1. The suicide the committed after the policy has been in force for a period of 2 years from
the date of its last reinstatement
2. The suicide is committed after a shorter period provided in the policy although within the
2 year period
3. The suicide is committed in the state of insanity regardless of the date of commission,
unless suicide is an excepted risk
*the policy cannot provide a period longer than 2 years. If the policy provides for a longer
period and the suicide is committed within said period but after 2 years, the insurer is liable.
But he is not liable if it can show that the policy was obtained with the intention to commit
suicide even in the absence of any suicide exclusion in the policy.
Accidental death benefit clause- gives the beneficiary additional benefits if death of the insured
is through accidental means; bodily injury effected solely through external and violent means
sustained in an accident and independently of all the other causes.
*the death of the insured is still compensable under the Accident Death Clause if the insured died
because a malefactor had fired shot that killed the insured merely to scare away the people
around the malefactor for the latters protection and not necessary to kill the insured.

Transfer of Life Policy- may be the object of voluntary and

involuntary transfer. Insurable interest on the part of the transferee is not necessary. Notice to
the insurer is not even necessary.

Exempt from execution- proceeds of life insurance are exempt from execution; the exemption
applies to ordinary life insurance contract, as well as to those which, although intended primarily
to indemnify for risks arising from accident.
Insolvency- the assignee acquires no beneficial interest in insurance effected on the life of the
insolvent; except to the extent that such insurance contains assets which can be realized upon as
the date when the petition of insolvency is filed.
Group Life Insurance- a group of individuals are covered by one master contract; policy holder
may be an employer who obtains a group insurance coverage over the lives of his employee; it
provides life or health insurance coverage for the employees of one employer