Held
Yes, Longlife Insurance Company should pay Vanessa, under Section 48 of the Insurance and Pre-need Codes.
Explanation
Section 48 of the Insurance and Pre-need Codes provides that if a life insurance policy has been in force during the lifetime of the insured for at least two years from the date of issue, the insurer loses the right to rescind the policy on grounds of fraudulent concealment or misrepresentation by the insured or the insured's agent. This means that any misrepresentation made by the insured or the insured's agent regarding the insured's health or other material facts cannot be used to void the policy after this two-year period has elapsed while the insured was still alive. The purpose of this provision is to protect legitimate policyholders and beneficiaries from unwarranted denial of claims after a reasonable period has passed, ensuring that insurers investigate thoroughly within the first two years of the policy. The phrase "during the lifetime" means that the policy must have been in force for two years while the insured was alive; if the insured dies after this period, the insurer cannot contest the policy on grounds of fraud or misrepresentation.
Application to the facts
In this case, Vanessa took out the insurance policy on Carlo's life on January 26, 2017. Carlo died on March 21, 2019, which is more than two years after the policy was issued. Although Vanessa misrepresented Carlo's health condition by stating he was in perfect health despite knowing he had asthma, this misrepresentation occurred more than two years before Carlo's death. Since the policy was in force for more than two years during Carlo's lifetime, Longlife Insurance Company cannot rescind the policy or deny the claim based on the misrepresentation. Therefore, Vanessa, as the beneficiary, is entitled to the insurance proceeds. The insurer's obligation to pay arises immediately upon presentation of the claim and proof of death, subject to the provisions of Section 248 regarding payment within sixty days.
"The proceeds of a life insurance policy shall be paid immediately upon maturity of the policy, unless such proceeds are made payable in installments or as an annuity, in which case the installments, or annuities shall be paid as they become due: Provided, however, That in the case of a policy maturing by the death of the insured, the proceeds thereof shall be paid within sixty (60) days after presentation of the claim and filing of the proof of death of the insured. Refusal or failure to pay the claim within the time prescribed herein will entitle the beneficiary to collect interest on the proceeds of the policy…
"Whenever a right to rescind a contract of insurance is given to the insurer by any provision of this chapter, such right must be exercised previous to the commencement of an action on the contract. After a policy of life insurance made payable on the death of the insured shall have been in force during the lifetime of the insured for a period of two (2) years from the date of its issue or of its last reinstatement, the insurer cannot prove that the policy is void ab initio or is rescindable by reason of the fraudulent concealment or misrepresentation of the insured or his agent."
Laws retrieved
Everything retrieval surfaced, not only what the answer relied on. Read the ones it quotes.
- Section 10, The Insurance and Pre-need Codes
- Section 19, The Insurance and Pre-need Codes
- Section 48, The Insurance and Pre-need Codes
- Section 233, The Insurance and Pre-need Codes
- Section 248, The Insurance and Pre-need Codes
- Section 236, The Insurance and Pre-need Codes
"[CASE] Manila Bankers Life Insurance Corporation v. Aban, G.R. No. 175666 (2013-07-29) — MANILA BANKERS LIFE INSURANCE CORPORATION, Petitioner. vs. CRESENCIA P. ABAN, Respondent. — Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 175666 July 29, 2013 MANILA BANKERS LIFE INSURANCE CORPORATION, Petitioner. vs. CRESENCIA P. ABAN, Respondent. D E C I S I O N DEL CASTILLO,_J.:_ The ultimate aim of Section 48 of the Insurance Code is to compel insurers to solicit business from or provide insurance coverage only to legitimate and bona fide clients, by requiring them to thoroughly investigate th…
The Court in Manila Bankers Life Insurance Corporation v. Aban, G.R. No. 175666, explained that under Section 48, an insurer is given two years from the effectivity of a life insurance contract and while the insured is alive to discover or prove that the policy is void ab initio or is rescindable by reason of the fraudulent concealment or misrepresentation of the insured or his agent. After the two-year period lapses, or when the insured dies within the period, the insurer must make good on the policy, even though the policy was obtained by fraud, concealment, or misrepresentation. The so-called incontestability clause precludes the insurer from raising the defenses of false representations or concealment of material facts as to health and previous diseases if the insurance has been in force for at least two years during the insured's lifetime.
Cases retrieved
Everything retrieval surfaced, not only what the answer relied on. Read the ones it quotes.