Who are the parties to a Life Insurance contract?
The parties are as follows:
Who may NOT be a beneficiary?
Any person who is forbidden from receiving any donation under Article 739 of the New Civil cannot be named beneficiary of a life insurance policy by the person who cannot make any donation to him,
What is the extent of the creditor's insurable interest?
Where a debtor in good faith insures his life for the benefit of his creditor, the creditor is entitled to 100% of the insurance proceeds.
On the other hand, in case the insurance is taken by a creditor on the life of his debtor, insurable interest must be present. Accordingly, the insuring creditor could only recover such amount as remains unpaid at the time of the death of the debtor.
The requirement of insurable interest is meant to eliminate the temptation of taking out a policy for speculative or evil purposes. Insurance policies should be obtained in good faith, and not for the purpose of speculating upon the hazard of a life in which one has no interest in Paragraph (c), Section 10 of the same Code enumerates the kinds of insurable interest contemplated in Section 3, to wit:
Section 10. Every person has an insurable interest in the life and health:
x x x
(c) Of any person under a legal obligation to him for the payment of money, or respecting property or services, of which death or illness might delay or prevent the performance; and
x x x
What is a Term Life Insurance?
It is a type of life insurance which provides coverage for a limited or specified period only, otherwise known as policy term. In order to be indemnified, the following must be met:
What is a cash value life Insurance?
It is a type of insurance which provides lifetime coverage with a savings element which is othewise known as cash value. Consequently, it is more expensive compared to a term insurance.
What are the types of cash value insurance?
What is an annuity contract?
It is a contract whereby the insurer provides to make a series of periodic payments at a later date in exchange for the payment of a single premium or series of premiums from the insured. It can be further classified into the following:
What is Health Insurance?
it is an insurance that seeks to protect against risk of financial loss from illness or injury. It can be in the form of medical expense, long-term care, and disability income.
What is Medical Expense Coverage?
It pays for the treatment of the insured's illnesss and injuries such a basic medical care as well as dental care and critical illness coverage.
What is Long-Term Case Coverage?
It pays for the medical expenses relating to constant care at home or a qualified facility.
What is Disability Income Coverage?
It pays for the income lost if the insured is unable to work because of an illness or injury.
What is Waiver of Premium for Disability?
It is a supplemental benefit that allows waiver of premium while the insured is totally disabled.
What is Waiver of Premium of a Payor?
It is a supplemental benefit whereby the insurer waives the renewal premium if the policyowner dies or is totally disabled. In this scenario, the insured is different from the policyholder.
What is Disability Income Benefit?
It provides a monthly benefit to cover a portion of the income that the insured lost if he suffers from total disablement.
What is Incontestability Clause?
It is a provision in law that 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 rescindible by reason of fraudulent concealment or misrepresentation of the insured or his agent.
After two years, the defenses of concealment or misrepresentation, no matter how patent or well-founded, will no longer lie.
What is Disability Income Benefit?
It provides a monthly benefit to cover a portion of the income that the insured lost if he suffers from total disablement.
The parties are as follows:
- Policy owner - the party who owns the issued policy.
- Insured - the party whose life and health was insured. He may or may not be the policyowner.
- Beneficiary - the party who is designed to receive the insurance proceeds.
Who may NOT be a beneficiary?
Any person who is forbidden from receiving any donation under Article 739 of the New Civil cannot be named beneficiary of a life insurance policy by the person who cannot make any donation to him,
- Those made between persons who were guilty of adultery or concubinage at the time of the donation;
- Those made between persons found guilty of the same criminal offense, in consideration thereof;
- Those made to a public officer or his wife, descendants and ascendants, by reason of his office.
What is the extent of the creditor's insurable interest?
Where a debtor in good faith insures his life for the benefit of his creditor, the creditor is entitled to 100% of the insurance proceeds.
On the other hand, in case the insurance is taken by a creditor on the life of his debtor, insurable interest must be present. Accordingly, the insuring creditor could only recover such amount as remains unpaid at the time of the death of the debtor.
The requirement of insurable interest is meant to eliminate the temptation of taking out a policy for speculative or evil purposes. Insurance policies should be obtained in good faith, and not for the purpose of speculating upon the hazard of a life in which one has no interest in Paragraph (c), Section 10 of the same Code enumerates the kinds of insurable interest contemplated in Section 3, to wit:
Section 10. Every person has an insurable interest in the life and health:
x x x
(c) Of any person under a legal obligation to him for the payment of money, or respecting property or services, of which death or illness might delay or prevent the performance; and
x x x
What is a Term Life Insurance?
It is a type of life insurance which provides coverage for a limited or specified period only, otherwise known as policy term. In order to be indemnified, the following must be met:
- The insured dies during the policy term
- The policy is in force at the time of death
What is a cash value life Insurance?
It is a type of insurance which provides lifetime coverage with a savings element which is othewise known as cash value. Consequently, it is more expensive compared to a term insurance.
What are the types of cash value insurance?
- Whole life insurance - is a form of permanent life insurance for as long as you pay the premiums. It accumulates cash value, unlike Term Insurance, that you can withdraw or borrow against, if needed.
- Variable Unit-Linked Life Insurance (VUL) - it offers both flexible premiums and the ability to invest based on your risk appetite. However, there is a risk for this class of product since the principal is not guaranteed.
What is an annuity contract?
It is a contract whereby the insurer provides to make a series of periodic payments at a later date in exchange for the payment of a single premium or series of premiums from the insured. It can be further classified into the following:
- Fixed - it guarantees no loss on the principal amount invested.
- Variable - it provides no guarantee on the principal. However, it can provide higher yield if the market condition is favorable.
What is Health Insurance?
it is an insurance that seeks to protect against risk of financial loss from illness or injury. It can be in the form of medical expense, long-term care, and disability income.
What is Medical Expense Coverage?
It pays for the treatment of the insured's illnesss and injuries such a basic medical care as well as dental care and critical illness coverage.
What is Long-Term Case Coverage?
It pays for the medical expenses relating to constant care at home or a qualified facility.
What is Disability Income Coverage?
It pays for the income lost if the insured is unable to work because of an illness or injury.
What is Waiver of Premium for Disability?
It is a supplemental benefit that allows waiver of premium while the insured is totally disabled.
What is Waiver of Premium of a Payor?
It is a supplemental benefit whereby the insurer waives the renewal premium if the policyowner dies or is totally disabled. In this scenario, the insured is different from the policyholder.
What is Disability Income Benefit?
It provides a monthly benefit to cover a portion of the income that the insured lost if he suffers from total disablement.
What is Incontestability Clause?
It is a provision in law that 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 rescindible by reason of fraudulent concealment or misrepresentation of the insured or his agent.
After two years, the defenses of concealment or misrepresentation, no matter how patent or well-founded, will no longer lie.
What is Disability Income Benefit?
It provides a monthly benefit to cover a portion of the income that the insured lost if he suffers from total disablement.