violeta vs insular life(insurance)

8/18/2019 Violeta vs Insular Life(Insurance)

1/3

VIOLETA LALICAN VS INSULAR LIFE ASSURANCE COMPANY

DOCTRINE:

"The stipulation in a life insurance policy giving the insured the privilege to reinstate it uponwritten application does not give the insured absolute right to such reinstatement by the mere

filing of an application. The insurer has the right to deny the reinstatement if it is not satisfied asto the insurability of the insured and if the latter does not pay all overdue premium and all other

indebtedness to the insurer. After the death of the insured the insurance Company cannot be

compelled to entertain an application for reinstatement of the policy because the conditions

precedent to reinstatement can no longer be determined and satisfied."

FACTS:

Eulogio the husband of plaintiff applied for an insurance policy with respondent through

malaluan its agent, which contained a 20!ear Endowment ariable #ncome $ac%age &le'i $lan

worth $(00,000.00 with two riders valued at $(00,000.00 each, wherein, the plaintiff is named as

the primary beneficiary of the said policy. )nder the terms, Eulogio is re*uired to pay the

premiums on a *uarterly basis in the amount of +,02 of each year until the end of the 20year period of the policy. #ncluded in the terms is a grace period of - days for the payment of each

premium subse*uent to the first. #f any premium was not paid on or before the due date, the

policy would be in default, and if the premium remained unpaid until the end of the grace period,

the policy would automatically lapse and become void.

Eulogio failed to pay the -rd premium which was due on /anuary even after the lapse of the grace

period. ence, it became void. Eulogio as a remedy he filed an Application for 1einstatement

together with the amount of $+,02.00 to pay for the premium due on 2 /anuary 33+. owever,

this was not processed since he left unpaid the overdue interest thereon amounting to $-22.+.

Thus, #nsular 4ife instructed Eulogio to pay the amount of interest and to file another application

for reinstatement and Eulogio was li%ewise advised by 5alaluan to pay the premiums that

subse*uently became due on 2 April 33+ and 2 /uly 33+, plus interest. 6n 7 8eptember33+, eulogio submitted his 2nd application for reinstatement in the amount of 7,(00 which was

instead received by the husband of malaluan since she was on a business errand, A receipt was

issued for the amount deposited by eulogio.

6n sept 7, 33+ eulogio died of cardiorespiratory arrest. 9ithout %nowing of Eulogio:s death,

5alaluan forwarded to the #nsular 4ife the 2nd application of reinstatement and the amount of7,(00. This application was not acted upon anymore since insular life was already informed by

the death on sept 2, 33+.

$laintiff filed with #nsular 4ife a claim for payment of the full proceeds of the $olicy of hishusband. The respondent denied the claim on the ground that the policy has already lapsed and

there was failure to reinstate. $laintiff re*uested for a reconsideration of the disallowance over theclaim. This was also denied. 6n august , 333 #nsular 4ife responded a demand letter of the

plaintiff by agreeing to conduct a reevaluation of ioleta:s claim.

9ithout waiting for the reevaluation the plaintiff filed a complaint in the 1TC for death claim

benefit. The court however ruled in favor of respondent on the ground that the $olicy had indeed

lapsed and Eulogio needed to have the same reinstated


2/3

ISSUE:

WON E)46;#6 9A8 A #=8)1A=CE $64#C!

EAT

HELD:

No, The $olicy had already lapsed is a fact beyond dispute. Eulogio:s filing of his Application for

1einstatement with #nsular 4ife constitutes an admission that $olicy had lapsed.

To reinstate a policy means to restore the same to premiumpaying status after it has been

permitted to lapse.


3/3

Application for 1einstatement and accompanying deposits, for processing and approval by the

latter.

Eulogio:s death, Dust hours after filing his Application for 1einstatement and depositing his

payment for overdue premiums and interests with 5alaluan, does not constitute a specialcircumstance that can persuade this Court to already consider $olicy =o. 30332 reinstated. 8aid

circumstance cannot override the clear and e'press provisions of the $olicy Contract andApplication for 1einstatement, and operate to remove the prerogative of #nsular 4ife thereunder

to approve or disapprove the Application for 1einstatement. Even though the Court commiserates

with ioleta, as the tragic and fateful turn of events leaves her practically emptyhanded, the

Court cannot arbitrarily burden #nsular 4ife with the payment of proceeds on a lapsed insurance

policy. /ustice and fairness must e*ually apply to all parties to a case. Courts are not permitted to

ma%e contracts for the parties. The function and duty of the courts consist simply in enforcing and

carrying out the contracts actually made.

Eulogio:s death, Dust hours after filing his Application for 1einstatement and depositing his

payment for overdue premiums and interests with 5alaluan, does not constitute a special

circumstance that can persuade this Court to already consider $olicy =o. 30332 reinstated. 8aid

circumstance cannot override the clear and e'press provisions of the $olicy Contract andApplication for 1einstatement, and operate to remove the prerogative of #nsular 4ife thereunder

to approve or disapprove the Application for 1einstatement. Even though the Court commiserates

with ioleta, as the tragic and fateful turn of events leaves her practically emptyhanded, the

Court cannot arbitrarily burden #nsular 4ife with the payment of proceeds on a lapsed insurance policy. /ustice and fairness must e*ually apply to all parties to a case. Courts are not permitted to

ma%e contracts for the parties. The function and duty of the courts consist simply in enforcing and

carrying out the contracts actually made.

THEREFORE, Polic No -.//--0 #!($in!d l$'"!d $nd )oid

violeta vs insular life(insurance)

Documents