NO. RN is not correct. After the issuance of the check by Danny for the full amount of the premium, the unconditional delivery of an insurance policy of RN to Danny corresponding to the terms of the application ordinarily consummates the contract, and the policy as delivered becomes the final contract between the parties. Where the parties, so intend, the insurance becomes effective at the time of the delivery of the policy notwithstanding the fact that the check was not yet encashed. My answer will still be the same even if the check is dated October 15, 2013, since an acknowledgment in a policy of the receipt of premium is conclusive evidence of its payment for the purpose of making the policy binding.
Three instances when an insured is entitled to a return of premium paid are:
1. To the whole premium, if no part of his interest in the thing insured be exposed to any of the perils insured against.
2. Where the insurance is made for a definite period of time and the insured surrenders his policy, to such portion of the premium as corresponds with the unexpired time at a pro rata rate, unless a short period rate has been agreed upon and appears on the face of the policy, after deducting from the whole premium any claim for loss or damage under the policy which has previously accrued.
3. When the contract is voidable on account of the fraud or misrepresentation of the insurer or of his agent or on account of facts the existence of which the insured was ignorant without his fault; or when, by any default of the insured other than actual fraud, the insurer never incurred any liability under the policy.
NO. The beneficiary of X cannot collect on the policy. Concealment, as a defense against liability by the insurer, may either be intentional or unintentional. Lack of knowledge on the part of the insured about her ailment will not preclude the insurer from raising the defense. The insurer may be held in estoppel only if, having known of the concealed or misrepresented fact, still accepts the payment of premium which is not the situation in this case.
I would rule in favor of the insurance company. The policy is still contestable considering that at the time of the death of Roberto, the policy was effective for a period of 1 year only. The incontestability period applies only if the policy had been in effect for a period of at least 2 years at the time of the death of the insured. As regards “during the lifetime of the insured”, the Supreme Court has already ruled that the said phrase simply means that the policy is considered no longer in force at the time of the death of the insured.
NO. The incontestability clause does not apply. The insured died within less than 2 years from the issuance of the policy on September 23, 1990. The insured died on April 26, 1992, or less than 2 years from September 23, 1990. The right of the insurer to rescind is only lost if the beneficiary has commenced an action on the policy. There is no such action in this case.
Assuming that the incontestability clause does not apply because the policy has not been in force for 2 years from date of issue during the lifetime of the insured, the decision of the insurance company not to pay is justified.
There was fraudulent concealment. It is not material that the insured died of a different cause than the fact concealed. The fact concealed, that is the heart ailment, is material to the determination by the insurance company whether or not to accept the application for insurance and to require the medical examination of the insured.
However, if the incontestability clause applies to the insurance policy covering the life of the insured had been in force for 2 years from the issuance thereof, the insurance company would not be justified in denying the claim for the proceeds of the insurance and in returning the premium paid. In that case, the insurer cannot prove the policy void ab initio or rescindable by reason of fraudulent concealment or misrepresentation of the insured.
YES. The life insurance policy in question was issued on January 2, 1990. More than 2 years had elapsed when Renato, the insured, died on March 1, 1992. The incontestability clause applies.
NO. Petra’s suit will not prosper (assuming that the policy of life insurance has been in force for a period of less than 2 years from the date of its issue). The matters which Juan failed to disclose was material and relevant to the approval and issuance of the insurance policy. They would have affected Good Life’s action on his application, either by approving it with the corresponding adjustment for a higher premium or rejecting the same. Moreover, a disclosure may have warranted a medical examination of Juan by Good Life in order for it to reasonably assess the risk involved in accepting the application.
In any case, good faith is no defense in concealment. The waiver of a medical examination in the “non-medical” life insurance from Good Life makes it even more necessary that Juan supply complete information about his previous hospitalization for such information constitutes an important factor which Good Life takes into consideration in deciding whether to issue the policy or not.
If the policy of life insurance has been in force for a period of 2 years or more from the date of its issue (on which point the given facts are vague) then Good Life can no longer prove that the policy is void ab initio or is rescindable by reason of the fraudulent concealment or misrepresentation of Juan.
NO. The concealed fact is material to the approval and issuance of the insurance policy. It is well settled that the insured need not die of the disease he failed to disclose to the insurer. It is sufficient that his non- disclosure misled the insurer in forming his estimate of the risks of the proposed insurance policy or in making inquiries.
YES. The insurance company correctly rescinded the policy because of concealment (Section 27 of Insurance Code). Benny did not disclose that he was suffering from diabetes, hypertension, and hepatoma. The concealment is material, because these are serious ailments (Florendo v. Philam Plans, Inc., 666 SCRA 618, 2012). Benny died less than two years from the date of the issuance of the policy. (Section 48 of Insurance Code)
