W5 Lalican - vs.InsularLife

G.R. No.
183526 August 25, 2009
VIOLETA R. LALICAN vs. THE INSULAR LIFE ASSURANCE COMPANY LIMITED, AS

REPRESENTED BY THE PRESIDENT VICENTE R. AVILON
FACTS:
Violeta is the widow of the deceased Eulogio C. Lalican. During his lifetime, Eulogio applied for an
insurance policy with Insular Life through Josephine Malaluan, its agent in Gapan City, who issued in
favor of Eulogio Policy No. 9011992, which contained a 20-Year Endowment Variable Income Package
Flexi Plan worth ₱500,000.00, with two riders valued at ₱500,000.00 each. Thus, the value of the policy
amounted to ₱1,500,000.00. Violeta was named as the primary beneficiary.
Eulogio failed to pay the premium due on 24 January 1998, even after the lapse of the grace period of 31
days. Policy No. 9011992, therefore, lapsed and became void.
Eulogio an Application for Reinstatement of Policy No. 9011992, together with the amount of ₱8,062.00
to pay for the premium due on 24 January 1998. Insular Life notified Eulogio that his Application for
Reinstatement could not be fully processed because, although he already deposited ₱8,062.00 as payment
for the 24 January 1998 premium, he left unpaid the overdue interest thereon amounting to ₱322.48
Eulogio went to Malaluan’s house and submitted a second Application for Reinstatement including the
amount of ₱17,500.00, representing payments for the overdue interest on the premium for 24 January
1998, and the premiums which became due on 24 April 1998 and 24 July 1998. A while later, on the
same day, 17 September 1998, Eulogio died of cardio-respiratory arrest secondary to electrocution.
Without knowing of Eulogio’s death, Malaluan forwarded to the Insular Life Regional Office in the City
of San Fernando, on 18 September 1998, Eulogio’s second Application for Reinstatement of Policy No.
9011992 and ₱17,500.00 deposit. However, Insular Life no longer acted upon Eulogio’s second
Application for Reinstatement, as the former was informed on 21 September 1998 that Eulogio had
already passed away.
Insular Life informed Violeta that her claim could not be granted since, at the time of Eulogio’s death,
Policy No. 9011992 had already lapsed, and Eulogio failed to reinstate the same.Violeta requested a
reconsideration of the disallowance of her claim.
Without waiting for the result of the re-evaluation by Insular Life, Violeta filed with the RTC, a
Complaint for Death Claim Benefit.
The RTC rendered a Decision in favor of Insular Life. The RTC found that Policy No. 9011992 had
indeed lapsed and Eulogio needed to have the same reinstated.
ISSUES:
1. WON the Decision of the court a quo dated August 30, 2007, can still be reviewed despite having
allegedly attained finality and despite the fact that the mode of appeal that has been availed of by Violeta
is erroneous? (NO)
2. WON the Regional Trial Court in its original jurisdiction has decided the case on a question of law not
in accord with law and applicable decisions of the Supreme Court? (NO)
3. WON Eulogio was able to reinstate the lapsed insurance policy on his life before his death on 17
September 1998 (NO)
RULING:
In general, an insurable interest is that interest which a person is deemed to have in the subject matter
insured, where he has a relation or connection with or concern in it, such that the person will derive
pecuniary benefit or advantage from the preservation of the subject matter insured and will suffer
pecuniary loss or damage from its destruction, termination, or injury by the happening of the event
insured against. The existence of an insurable interest gives a person the legal right to insure the subject
matter of the policy of insurance. Section 10 of the Insurance Code indeed provides that every person has
an insurable interest in his own life. Section 19 of the same code also states that an interest in the life or
health of a person insured must exist when the insurance takes effect, but need not exist thereafter or
when the loss occurs.
Upon more extensive study of the Petition, it becomes evident that the matter of insurable interest is
entirely irrelevant in the case at bar. It is actually beyond question that while Eulogio was still alive, he
had an insurable interest in his own life, which he did insure under Policy No. 9011992. The real point
of contention herein is whether Eulogio was able to reinstate the lapsed insurance policy on his life
before his death on 17 September 1998. The Court rules in the negative.
That Policy No. 9011992 had already lapsed is a fact beyond dispute. The Policy Contract and the
Application for Reinstatement provide for specific conditions for the reinstatement of a lapsed policy.
In the instant case, Eulogio’s death rendered impossible full compliance with the conditions for
reinstatement of Policy No. 9011992. True, Eulogio, before his death, managed to file his Application for
Reinstatement and deposit the amount for payment of his overdue premiums and interests thereon with
Malaluan; but Policy No. 9011992 could only be considered reinstated after the Application for
Reinstatement had been processed and approved by Insular Life during Eulogio’s lifetime and good
health.
The Court agrees with the RTC that the conditions for reinstatement under the Policy Contract and
Application for Reinstatement were written in clear and simple language, which could not admit of any
meaning or interpretation other than those that they so obviously embody. A construction in favor of the
insured is not called for, as there is no ambiguity in the said provisions in the first place.
Eulogio’s death, just hours after filing his Application for Reinstatement and depositing his payment for
overdue premiums and interests with Malaluan, does not constitute a special circumstance that can
persuade this Court to already consider Policy No. 9011992 reinstated. Said circumstance cannot override
the clear and express provisions of the Policy Contract and Application for Reinstatement, and operate to
remove the prerogative of Insular Life thereunder to approve or disapprove the Application for
Reinstatement.
Policy No. 9011992 remained lapsed and void, not having been reinstated in accordance with the Policy
Contract and Application for Reinstatement before Eulogio’s death. Violeta, therefore, cannot claim any
death benefits from Insular Life on the basis of Policy No. 9011992; but she is entitled to receive the full
refund of the payments made by Eulogio thereon.

W5 Lalican - vs.InsularLife

Uploaded by

Copyright:

Available Formats

W5 Lalican - vs.InsularLife

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

W5 Lalican - vs.InsularLife

Uploaded by

Copyright:

Available Formats

G.R. No.

183526 August 25, 2009

VIOLETA R. LALICAN vs. THE INSULAR LIFE ASSURANCE COMPANY LIMITED, AS

You might also like