Life insurance is insurance on human lives and insurance appertaining thereto or connected therewith.

Sec. 179. Insurance Code.

1. Life insurance may be defined as insurance payable on the death of a person, or on his surviving a specified period , or otherwise contingently on the continuance or cessation of life.

2. Life insurance is a mutual agreement by which a party agrees to pay a given sum on the happening of a particular event contingent on the duration of human life, in consideration of the payment of a smaller sum immediately, or in periodical payments by the other party.

3. Life insurance is a contract to make specific payments to pay to a certain person, the beneficiary, upon the death of a person whose life has been insured.

1. Insurance payable on the death of a person

2. It is a mutual agreement3. It is a contract

Other than the insurer parties include:

1. Owner of the policy2. Cestui que vie3. Beneficiary

1. Liability absolutely certain2. Amount of insurance generally

without limit3. Life policy is a valued policy4. Directly pecuniary loss not required

Life Insurance Fire and Marine Insurance

1. Contract of Investment Contracts of Indemnity

2. Valued Policy Open or Valued

3. Transferable even with no insurable interest

Must have insurable interest

4. Consent is not essential to the validity of assignment

Essential

5. Insurable Interest need not exist after insurance takes effect or when loss occurs

Must exist not only when the insurance takes effect but also when loss occurs

Life Insurance Fire and Marine Insurance

6. Insurable Interest need not have any legal basis

Must have a legal basis

7. The contingency is a certain event The contingency may or may not occur

8. Payment is certain (will have to be paid sooner or later)

Uncertain (the amount insured may not have to be paid)

9. May be terminated only by the insured

Either the Insured or the Insurer may cancel

10. “Loss” can seldom be measured by cash value

The reverse is generally true

11. No obligation to prove actual financial loss

Required to submit proof of actual pecuniary loss

Property exempt from execution. – Except as otherwise expressly provided by law, the following property, and no other, shall be exempt from execution:

------ (k) Monies, benefits, privileges, or

annunities accruing or in any manner growing out of any life insurance

Rule 39, Sec. 12 (k), Rules of Court

1. When accident insurance regarded as life insurance

2. Burden of Proof

1. Ordinary life policy2. Limited payment life policy3. Term insurance policy4. Endowment policy

Ordinary life policy is one under the terms of which the insured is required to pay a certain fixed premium annually or at more frequent intervals throughout his entire life and the beneficiary is entitled to receive payment under the policy only after the death of the insured.

Limited payment life policy is one under the terms of which the premiums are payable only during a limited period of years, usually ten, fifteen, or twenty.

Term insurance policy is one which provides coverage only if the insured dies during a limited period.

Endowment policy is one under the terms of which the insurer binds himself to pay a fixed sum to the insured if he survives for a specified period, or, if he dies within such period, to some other person indicated.

1. Life Insurancea) Actual Deathb) Living Deathc) Retirement Death

2. Health, accident, and disability insurance

By the aleatory contract of life annuity, the debtor binds himself to pay an annual pension or income during the life of one or more determinate persons in consideration of a capital consisting of money or other property, whose ownership is transferred to him at once with the burden of the income.

Art. 2021, Civil

Code

The annuity has been called the “upside-down application of the life insurance principle”.

Life Insurance

Payment of Premium

Upon death

Payment to beneficiary

starts

Life Annuity

Payment of Premium

For as long as the

insured lives

Payment to the insured

stops

Annuity Contract Life Insurance Policy

1. Ensures against economic problems resulting from a long life

Ensures against economic problems resulting from an early death

2. From the Insurer’s viewpoint looks to transiency

Looks to longevity

3. Lump sum is paid immediately and then annuity payments are received by the annuitant for as long as he lives

Payment of annuity and then beneficiary is paid the lump sum upon death of the insured

4. An Investment An Indemnity

The insurer in a life insurance contract shall be liable in case of suicide only when it is committed after the policy has been in force for a period of two years from the date of its issue or of its last reinstatement, unless the policy provides a shorter period; Provided, however, that suicide committed in the state of insanity shall be compensable regardless of the date of commission.

Sec. 180 – A. Insurance Code.

When Liable When not Liable

1. Committed after policy has been in force two years from the date of its issue or of its last reinstatement

Committed within the two year period not by reason of insanity

2. Committed after a shorter period provided in the policy although within the two year period

Committed by reason of insanity but is not among the risks assumed by the insurer regardless of the date of commission

3. Committed in the state of insanity regardless of date of commission, unless suicide is an excepted risk

If the insurer can show that the policy was obtained with the intention to commit suicide even in the absence of any suicide exclusive in the policy

A policy of insurance upon life or health may pass by transfer, will or succession to any person, whether he has an insurable interest or not, and such person may recover upon it whatever the insured might have recovered.

Section 181. Insurance Code.

1. Insurable interest of assignee in life insurance not required

2. Where assignment used as a cloak to hide an illegal scheme

1. Insurable interest of assignee in life insurance not required All life insurance policies are declared by law to be assignable regardless of whether the assignee has an insurable interest in the life of the insured or not.

2. Where assignment used as a cloak to hide an illegal scheme

The courts will not permit the process of assignment to be used as a cloak to hide an illegal intent to make contracts on human life.

1. With waiver of right to change beneficiary

2. Without such waiver

Notice to an insurer of a transfer or bequest thereof is not necessary to preserve the validity of a policy of insurance upon life or health, unless thereby expressly required.

Section 182. Insurance Code.

1. Notice not required by policy2. Notice required by policy3. Assignment with consent of insurer

Unless the interest of a person insured is susceptible of exact pecuniary measurement, the measure of indemnity under a policy of Insurance upon life or health is the sum fixed in the policy.

Section 183. Insurance Code

The extent or amount of indemnity payable on the death of the insured under a policy of insurance upon life or health is the amount fixed in the policy in effect, life policies are valued ones.