I got an interesting query on life insurance.
Here is the situation:
Tatay lived a colorful life. In his lifetime he had a legal wife and children.
Later tatay separated from his legitimate family and lived with a paramour.
Tatay and paramour bore a child named R-Jay.
While living with paramour, Tatay got a life insurance naming his paramour and their minor illegitimate child R-Jay as beneficiary.
Two groups now seek to claim the proceeds of Tatay’s life insurance.
First, the legitimate family members (wife and children) claim they are entitled to the insurance proceeds being the legal hers.
On the other side is paramour (with her illegitimate child R-Jay) claiming they are entitled to the proceeds since they were the named beneficiaries.
The question posed to me was: who gets the insurance proceeds, the legitimates, the paramour and her child, or share in accordance with rules on succession?
There is a rule taken from American law that whoever is named as beneficiary gets the life insurance proceeds.
Insurance proceeds are likened to a donation, a gift out of liberality.
In our case, paramour is disqualified from becoming a beneficiary of a life insurance, even if she was expressly written as one.
The mandate of Article 2012 of the Civil Code cannot be laid aside: any person who cannot receive a donation cannot be named as beneficiary in the life insurance policy of the person who cannot make the donation.
The Civil Code also bars donations between common law spouses (not married).
“Policy considerations and dictates of morality rightly justify the institution of a barrier between common law spouses in record to Property relations since such ultimately encroaches upon the nuptial and filial rights of the legitimate family,” said the Supreme Court.
The legitimates cannot also receive the insurance proceeds.
Life insurance proceeds out of special contract.
With a beneficiary, the proceeds will not belong to the category of “inheritable” items.
It is only in cases were there is no beneficiary or when the beneficiary is disqualified by law to receive the proceeds that the insurance policy proceeds shall redound to the benefit of the estate of the insured.
So it is the illegitimate child R-Jay who is entitled to the insurance proceeds.
“No legal prosprciption exists in naming as beneficiaries, children of illicit relations by the insured,” said the Supreme Court.
But since R-Jay is still a minor, someone, likely the paramour (mother) should have herself appointed by the court as legal guardian first.
Until the court appoints a guardian in behalf of the minor illegitimate, the insurance company can withhold the release of the check.
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