A was a rich businessperson with two wives. He married B, with whom he had three children namely, C, D, and E. While their marriage was subsisting, he met X with whom he madly fell in love. He also married her despite his first marriage. They had a child named Y. In his life insurance policy from XYZ Life Insurance Corp., A designated his second wife, X, and their son, Y, as beneficiaries. Five years later, A died. X filed a claim for the proceeds of the policy for herself and for Y as the designated beneficiaries. At the same time, B also filed a claim for death benefits for herself and her children, C, D, and E, as A’s legal wife and legitimate children. Who is/are entitled to the life insurance proceeds? Reason(s).
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Y alone is entitled to the full life insurance proceeds. Under Article 2012 in relation to Article 739 of the Civil Code, a person guilty of concubinage cannot be designated as a beneficiary. However, under the Insurance Code and
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Quick check
Under Article 2012 in relation to Article 739 of the Civil Code, why is the designation of a concubine as a life insurance beneficiary void?
Naming a concubine as a life insurance beneficiary is void because Article 739 prohibits donations between persons guilty of concubinage.
Is an illegitimate child legally qualified to be designated as a beneficiary in a parent's life insurance policy?
An illegitimate child can be validly designated as a life insurance beneficiary because no legal prohibition bars such designation.
Under Heirs of Maramag v. Maramag, what happens to the insurance proceeds when one co-beneficiary is disqualified due to concubinage?
The disqualified beneficiary's share accrues to the remaining validly designated co-beneficiary under the policy.
Why are the legitimate wife and legitimate children who were not named as beneficiaries unable to claim the life insurance proceeds?
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A married man names his mistress and their illegitimate son as joint beneficiaries in his life insurance policy. Upon his death, who receives the proceeds?
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Learn more about these topics
1. Disqualification of Beneficiaries
Under Article 2012 in relation to Article 739 of the Civil Code, any person who is forbidden from receiving donations cannot be named a beneficiary of a life insurance policy. Specifically, donations made between persons who were guilty of adultery or concubinage at the time of the designation are void. Consequently, a married person cannot validly designate a concubine or illicit partner as a beneficiary in a life insurance contract. Such a designation is void ab initio as a matter of public policy.
2. Illegitimate Child Rights
Unlike an illicit partner, an illegitimate child is not prohibited by law from being designated as a life insurance beneficiary. The Insurance Code allows a policyholder to freely designate any beneficiary who is not expressly disqualified by law. Under prevailing jurisprudence in Heirs of Maramag v. Maramag, illegitimate children possess an insurable interest in the life of their parent and may validly receive insurance proceeds. The disqualification of the mother due to concubinage does not affect or invalidate the independent designation of her illegitimate child.
3. Share Accrual Rule
In a joint beneficiary designation where one beneficiary is disqualified by law, the forfeited share accrues to the remaining validly designated beneficiary. Under insurance jurisprudence, when a policyholder designates multiple beneficiaries jointly and one designation fails due to legal prohibition, the valid beneficiary absorbs the disqualified portion. Legal heirs who were not designated in the insurance policy cannot claim the proceeds, because insurance proceeds pass by contract to the designated beneficiaries rather than through intestate succession.