A life insurance contract becomes indisputable after two years



Dear PAO,

My husband applied for a life insurance policy after receiving his premium in December 2018. He received a policy after a week. Sadly, he passed away last month from a heart attack and several heart complications. The insurance company denied my claim to my husband’s insurance on the grounds of misrepresentation and cover-up as my husband did not report any illness when he applied for his life insurance. Was the refusal of my complaint valid?


Dear Leizel,

For your information, the law that deals with your situation is Article 48 of the Insurance Code of the Philippines which states:

“Article 48: Whenever a right to terminate an insurance contract is conferred on the insurer by a provision of this chapter, this right must be exercised before bringing an action on the contract.

“After a life insurance policy payable on the death of the insured has been in force during the lifetime of the insured for a period of two 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 terminable due to fraudulent concealment or false declaration by the insured or his representative. (emphasis provided)

Article 48 of the said law regulates the actions of insurers and policyholders. This gives insurers two years to verify whether the insurance policy was obtained by fraud, concealment or misrepresentation. It also protects legitimate policyholders against unjustified denial of their claims or delay in collecting insurance proceeds due to allegations of fraud, concealment or misrepresentation by insurers who can no longer be established. after two years.

The Supreme Court in The Insurance Life Assurance Company, Ltd. vs. Paz Y. Khu, et al. (GR 195176, April 18, 2016, Ponente: Associate Justice Mariano del Castillo), gives an enlightening explanation on article 48 of the Insurance Code, namely:

“The insurer is deemed to have the necessary facilities to discover such fraudulent concealment or false declaration within a period of two (2) years. It is not fair for the insurer to collect the premiums while the insured is still alive, for the issue of fraudulent concealment or false declaration on the death of the insured in order to defeat the beneficiary’s right to recover under the policy At least two (2) years from the issue of the policy or its last reinstatement, the beneficiary enjoys stability upon the death of the insured. The provision also specifies when the two-year period should begin in the event of the expiration and reinstatement of the policy, i.e. from the date of the last reinstatement. xxx xxx xxx

“It should be remembered that an insurance contract is an adhesion contract which must be interpreted liberally in favor of the insured and strictly against the insurer in order to safeguard the latter’s interest. xxx xxx xxx An insurance contract, being a membership contract xxx

“More often than not, insurance contracts are adhesion contracts containing technical terms and conditions of the industry, confusing or even understandable to laymen, which are imposed on those who wish to avail themselves of the insurance. As such, insurance contracts are steeped in interest which must be taken into consideration whenever the rights and obligations of the insurer and the insured have to be delineated. Therefore, in order to protect the interests of insurance applicants, insurance companies should be compelled to act hastily on insurance claims, either deny or approve it or be required to honor the claim. as a valid, binding and effective insurance contract. “(Emphasis provided)

In accordance with the aforementioned case law and the provision of the Insurance Code, the refusal of your complaint was not valid. Your husband died more or less three years after taking out his life insurance policy. Therefore, the insurance company can no longer deny your claim on your deceased husband’s insurance policy.

We hope we have been able to answer your questions. Remember that this advice is based only on the facts you have related and our appreciation of them. Our opinion may vary when other facts are changed or developed.

Editor’s Note: Dear PAO is a daily column for the Public Prosecutor’s Office. Questions for Chef Acosta can be sent to [email protected]



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