Shortly after Yin and Yang were wed, they each took out separate life insurance policies on their lives, and mutually designated one another as sole beneficiary. Both life insurance policies provided for a double indemnity clause, the cost for which was added to the premium rate. During the last 10 years of their marriage, the spouses had faithfully paid for the annual premiums over the life policies from both their salaries. Unfortunately, Yin fell in love with his officemate, Vessel, and they carried on an affair. After two years, their relationship bore them a daughter named Vinsel. Without the knowledge of Yang, Yin changed the designation of the beneficiary to an “irrevocable designation” of Vinsel and Vessel jointly. When Yang learned of the affair, she was so despondent that, having chanced upon Yin and Vessel on a date, she rammed them down with the car she was driving, resulting in Vin’s death and Vessel’s complete loss of mobilization. Yang was sued for parricide, and while the case was pending, she filed a claim on the proceeds of the life insurance of Yin as irrevocable beneficiary, or at least his legal heir, and opposed the claims on behalf of Vessel and her daughter Vinsel. Yang claimed that her designation as beneficiary in Vin’s life insurance policy was irrevocable, in the nature of one “coupled with interest,” since it was made in accordance with their mutual agreement to designate one another as sole beneficiary in their respective life policies. She also claimed that the beneficiary designation of Vessel and the illegitimate minor child Vinsel was void being the product of an illicit relationship, and therefore without “insurable interest.”
(a) Is Yang correct in saying that her designation as beneficiary was irrevocable? (2.5%)
(b) Do Vessel and Vinsel have “insurable interest” on the life of Yin? (2.5%)
Suggested answer only. Not an official answer and not legal advice.
(a) No, Yang is not correct. (b) Vessel has no insurable interest, but Vinsel has insurable interest on Yin's life. Under Section 11 of the Insurance Code, beneficiary designation is revocable unless expressly waived in the
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Quick check
Under Section 11 of the Insurance Code, what is the default rule regarding changing life insurance beneficiaries?
Section 11 provides that beneficiary designation is revocable unless expressly waived in the policy.
Which statutory provision disqualifies a person guilty of concubinage or adultery from being designated as a life insurance beneficiary?
Article 2012 in relation to Article 739 voids insurance designations made in favor of persons guilty of adultery or concubinage.
Does an illegitimate child have an insurable interest in the life of her father under Philippine law?
Section 10(a) explicitly grants every person insurable interest in the life of his children without distinction.
Why is the designation of Vessel as a beneficiary in Vin's life insurance policy void?
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Which statute contains the primary provisions governing insurable interest and beneficiary revocability in the Philippines?
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Learn more about these topics
1. Beneficiary Revocability
Under Section 11 of the Insurance Code of the Philippines (Republic Act Number 10607), the insured shall have the right to change the beneficiary designated in the policy, unless the right to change has been expressly waived in the policy. A mere mutual oral or unwritten agreement between spouses to name each other as sole beneficiary does not convert a revocable designation into an irrevocable one. Without an explicit waiver written directly into the insurance contract, the insured retains full legal authority to alter the beneficiary designation at any time during the policy term.
2. Disqualification of Beneficiaries
Under Article 2012 in relation to Article 739 of the Civil Code of the Philippines (Republic Act Number 386), any person who is forbidden from receiving donations cannot be named beneficiary of a life insurance policy by the person who cannot make any donation to him. Specifically, donations made between persons who were guilty of adultery or concubinage at the time of the donation are void. Consequently, a married person cannot validly designate an adulterous partner as a life insurance beneficiary, rendering any such designation completely void.
3. Insurable Interest
Under Section 10(a) of the Insurance Code, every person has an insurable interest in the life and health of himself, of his spouse, and of his children. An illegitimate child possesses an inherent insurable interest in the life of her father under Section 10(a) regardless of her parents' marital status or illicit relationship. Unlike the adulterous partner whose designation is prohibited under Article 739 of the Civil Code, an illegitimate minor child is not disqualified by law and may validly be designated as a life insurance beneficiary.