If the illegitimate children are the designated beneficiaries in the life insurance policies, are they entitled to the proceeds as against the legitimate wife and children? This is the question raised in this case of Pabling.
Pabling obtained life insurance policies from two insurance companies (IL and GPL). IL insured Pabling under two policies wherein he designated his concubine Vina and his three children with her as beneficiaries. Subsequently, Pabling revoked the designation of Vina in one policy and IL disqualified her as beneficiary in the other policy. On the other hand, in the insurance policy obtained from GPL, Pabling did not name Vina but only the three illegitimate children as beneficiaries.
Subsequently, Pabling died under circumstances indicating foul play and Vina was even one of the suspects. So his legitimate wife Rica and their legitimate children filed a petition with the Regional Trial Court (RTC) against Vina, her children and IL and GL for revocation of the polices. Rica and the children claimed that Vina being a concubine of Pabling and a suspect in his murder was disqualified from being a beneficiary of the insurance policies and that her children with Pabling being illegitimate, are entitled to a lesser share of the insurance proceeds. They also alleged that pursuant to Section 12 of the Insurance Code, Vina’s share in the proceeds should be forfeited in their favor, because she brought about the death of Pabling. Thus they prayed that the share of Vina and portions of the shares of Pabling’s illegitimate children should be awarded to them as legitimate heirs of Pabling entitled to their respective legitimes. Were they correct?
No. Under Article 2011 of the Civil Code, insurance contracts shall be governed by special laws i.e. the Insurance Code. Section 53 of said Code states that “the proceeds of insurance shall be applied exclusively to the proper interest of the person in whose name or for whose benefit it is made unless otherwise specified in the policy.
Pursuant thereto, it is obvious that the only persons entitled to claim the insurance proceeds are either the insured, if still alive, or the beneficiary, if the insured is already deceased, upon the maturation of the policy. The exception to this rule is when the insurance contract intends to benefit third persons who are not parties to the same, in the form of favorable stipulations or indemnity. In such a case, said parties may directly sue and claim from the insurer.
In this case it is clear from the petition filed before the RTC that Rica and her children were not named as beneficiaries in the insurance policies issued by IL and GPL. They are not parties to the insurance contract and thus are not entitled to the proceeds thereof. Accordingly IL and GPL have no legal obligations to turn over the insurance proceeds to them. Even if Vina’s designation in one policy has been revoked and she was disqualified in the other policy, the designation of the illegitimate children in Pabling’s policies remains valid. Since an insured is not legally prohibited to name the children of illicit relationship as beneficiaries, the shares of Vina in the insurance policies whether forfeited by the court in view of prohibition on donations to concubine under Article 739 of the Civil Code or by the insurers themselves for reasons based on the insurance contracts, must be awarded to the said illegitimate children, the designated beneficiaries, to the exclusion of Rica and her children. It is only when the insured has not designated any beneficiary or when the designated beneficiary is disqualified by law to receive the proceeds that the insurance policy shall redound to the benefit of the estate of the insured. This is the ruling in the case of Heirs of Maramag vs. Insular Life et. al. G.R. 181132, June 5, 2009.