Published 24 September 2018, The Daily Tribune

Perhaps one time or another, we have all considered whether we really need a life insurance. Assuming that you are way beyond the iffy disposition and have realized its value, here are a few points to consider and remember.  Needless to state, these advice are anchored on the Revised Insurance Code, as interpreted by our Supreme Court.

As regards your options on the subject of life insurance, you can insure your own life, as well as your  spouse and children.  Recently, there has been a considerable increased interest in  insurance on the lives of minor children.  This may be attributed to the significantly lower amount of premium payment which is principally computed based on the age and medical condition/history of the insured.  Here, the parent who took out the insurance will be deemed as the payor and owner of the policy until the demise of the parent/payor or until the latter transfers ownership of the policy to the insured upon reaching the age of majority.  Of course, the options may vary depending on the terms of the policy to be issued.

As you may have already known, the more popular kind of life insurance available in the market  is what they call “variable life insurance” which is defined under Section 238 (b) as any “policy or contract on either a group or on an individual basis issued by an insurance company providing for benefits or other contractual payments or values thereunder to vary so as to reflect investment results of any segregated portfolio of investments or of a designated separate account in which amounts received in connection with such contracts shall have been placed and accounted for separately and apart from other investments and accounts.”

Simply put, this kind of insurance is a synthesis of life insurance protection and investment.  Data from the Insurance Commission show that the life insurance industry has been steadily experiencing growth in its sales and gross premium because of this kind of insurance which is fast becoming a popular alternative tool of investment, in addition to the more traditional ones like bonds and equities, as well as unit investment trust funds and mutual funds offered by banks and investment companies, respectively.

In filling-up the application for life insurance  policy, you need to be truthful and accurate in your answers particularly those pertaining to your medical condition and history.  This especially holds true when you have  medical records in any hospital or clinic.  In a number of cases involving denied claims, our Supreme Court has sustained the denial made by the insurance company based on the ground of material concealment or misrepresentation, that is, the insured failed to disclose material facts (like an illness or disease).  To paraphrase Section 31 which provides for the rule on how materiality is determined and as based on decided cases, a fact is deemed material if it can probably and reasonably influence the insurer in deciding on whether or not to accept the application and if yes, how much premium will be computed and charged.

Your duty to be truthful and accurate stands—

  • even though the kind of policy applied for is a “non-medical” insurance policy which does away with the usual medical examination requirement.

Our Supreme Court has ruled time and again that a “non-medical” insurance renders more material the duty of the insured to disclose in the application form all the information regarding his medical condition and history.

  • even though the insured did not have any intention to mislead or deceive the insurance company at the time of disclosure of the material fact.

Under the law, “concealment whether intentional or unintentional entitles the injured party to rescind a contract of insurance.”  Thus, good faith is not a valid defense to negate the effects of material concealment.  Thus, in case of doubt, the same should be resolved in favor of disclosure; and,

  • even though the eventual cause of death of the insured is not related to or has nothing to do with the illness/disease that was not disclosed.

In one case (“Sun Life vs. Court of Appeals”), our Supreme Court sustained the insurance company’s denial of the claim filed by the beneficiaries even though the cause of death of the insured (though a plane crash) has nothing to do with the insured’s undisclosed illness.

For sure, during the claims settlement period,  issues may be raised on the entitlement of the insured to the insurance proceeds against his duty to disclose. It is at this point that you will realize the most important consideration in getting life insurance—choose a reputable insurance company.

For comments and questions, please send email to