Insurance Premium
Insurance Premium
Insurance Premium
PREMIUM
Bricia, Jan Karlo Cases on Premium:
John Michael, Domalanta, Marc Denver
Erodias, Dominador III Soriano, Xander
Ragaza, Kenneth Yu, Oliver William
Premium – the agreed price for assuming and carrying
the risk – that is, the consideration paid an insurer for
undertaking to indemnify the insured against a specified
peril.
• Section 77. An insurer is entitled to payment of the
premium as soon as the thing insured is exposed to the
peril insured against. Notwithstanding any agreement
to the contrary, no policy or contract of insurance
issued by an insurance company is valid and binding
unless and until the premium thereof has been paid,
except in the case of a life or an industrial life policy
whenever the grace period provision applies, or
whenever under the broker and agency agreements
with duly licensed intermediaries, a ninety (90)-day
credit extension is given. No credit extension to a duly
licensed intermediary should exceed ninety (90) days
from date of issuance of the policy.
General Rule: No policy or contract of insurance issued
by an insurance company is valid and binding unless and
until the premium thereof has been paid.
Exceptions:
• In case of a life or an industrial life policy whenever the
grace period provision applies.
• Whenever a ninety (90) days credit extension is given
for the premium due.
• When the insurer makes a written acknowledgement in
a policy or contract of insurance of the receipt of
premium even if there is a stipulation therein that it
shall not be binding until the premium is actually paid.
Exceptions:
• When an agreement allowing the insured to pay the
premium in installments and partial payment has been
made at the time of the loss.
• When there is an agreement to grant the insured credit
extension for the payment of the premium and the loss
occurs before the expiration of the credit term.
• When estoppel bars the insurer from invoking section
77 to avoid recovery on a policy providing a credit term
for the payment of the premiums, as against the
insured who relied in good faith on such extension.
Effect of non-payment of premium
Exceptions:
• Where the failure to pay was due to the wrongful
conduct of the insurer such as when the insurer induced
the beneficiary under a policy to surrender it for
cancellation by falsely representing that the insurance
was illegal and void, and returning the premiums paid.
• Where the insurer has in any manner waived his right
to demand payment.
Effect of payment by Installments