Carlo and Bianca met in the La Boracay festivities. Immediately, they fell in love with each other and got married soon after. They have been cohabiting blissfully as husband and wife, but they did not have any offspring. As the years passed by, Carlo decided to take out an insurance on Bianca’slife for P1,000,000.00 with him (Carlo) as sole beneficiary, given that he did not have a steady source of income and he always depended on Bianca both emotionally and financially. During the term of the insurance, Bianca died of what appeared to bea mysterious cause so that Carlo immediately requested for an autopsy tobe conducted. It was established that Bianca died of a natural cause. More than that, it was also established that Bianca was a transgender all along – a fact unknown to Carlo. Can Carlo claim the insurance benefit? (5%)
Suggested answer only. Not an official answer and not legal advice.
Yes, Carlo can claim the insurance benefit.
Under Section 10(b) of the Insurance Code (RA 10607), every person has an insurable interest in the life and health of any person on whom he depends wholly or in part for support, or in whom he has a pecuniary interest. Unlike Section 10(a) which hinges on a valid marital relationship, insurable interest under Section 10(b) does not require legal kinship or a valid marriage.
Here, Carlo took out the life insurance policy on Bianca while depending on her financially and emotionally for support. Although their marriage may be void ab initio due to Bianca being a transgender woman, Carlo possessed a valid pecuniary insurable interest based on actual financial dependence at the time the policy took effect.
Therefore, Carlo is legally entitled to claim the P1,000,000.00 life insurance proceeds.
This is not an official scoring system and carries no weight with the Supreme Court or any bar review provider. It measures how much of the suggested answer's wording your response covers, not whether your reasoning is correct. For practice only.
Quick check
Under Section 10(b) of the Insurance Code (RA 10607), what creates an insurable interest in another person's life?
Section 10(b) of RA 10607 establishes insurable interest based on actual financial dependence or pecuniary interest.
When must an insurable interest in a life insurance policy exist under Philippine insurance law?
Insurable interest in life must exist at the time the policy takes effect.
Does the invalidity of a marriage defeat a life insurance claim where the beneficiary depended financially on the insured at policy inception?
Financial dependence provides an independent insurable interest under Section 10(b) regardless of marriage validity.
Under Section 11 of Republic Act Number 10607, when does a beneficiary forfeit the right to receive life insurance proceeds?
Section 11 provides that a beneficiary forfeits insurance proceeds if they willfully bring about the insured's death.
Which primary statute governs insurable interest, policy beneficiaries, and life insurance claims in the Philippines?
Republic Act Number 10607 is the Insurance Code of the Philippines.
Learn more about these topics
1. Life Insurable Interest
Under Section 10 of the Insurance Code of the Philippines (Republic Act Number 10607), every person has an insurable interest in the life and health of themselves, of any person on whom they depend wholly or in part for education or support, of any person under legal obligation to pay them money or respect property, and of any person upon whose life an estate or interest depends. Insurable interest in life must exist at the time the insurance takes effect, but need not exist when the loss occurs.
2. Financial Dependence Grounds
Under Section 10(b) of Republic Act Number 10607, insurable interest in life does not depend exclusively on a legally valid spousal relationship or blood kinship. A person who depends wholly or in part upon another for support or financial assistance possesses an independent pecuniary insurable interest in that person's life. Even if the underlying marriage between the parties is legally void ab initio, actual financial dependence at the policy's inception creates a valid insurable interest capable of supporting a life insurance contract.
3. Beneficiary Designation Rights
Under Philippine insurance law and Section 11 of Republic Act Number 10607, an insured or policyholder who takes out an insurance policy on another person's life based on a valid pecuniary insurable interest may designate themselves as the sole beneficiary. Where the contract is procured in good faith and without fraudulent intent or unlawful causation of death, the designated beneficiary is legally entitled to collect the full policy proceeds upon the insured's death from natural causes.