HEIRS OF LORETO MARAMAG vs.

MARAMAG
The illegitimate child who was named as a beneficiary in a life insurance
policy of his father is entitled to the proceeds thereof.
FACTS:
Petitioners here filed a case before the RTC for revocation and reduction of
insurance proceeds for being void and inofficious. They alleged that they
were the legitimate wife and children of Loreto and that the respondents
were the Loretos illegitimate family and Eva de Guzman was a concubine of
Loreto and a suspect in the killing of the latter and thus disqualified to
recieved proceeds from insurance taken out by Loreto from Insular life and
Grepa Life and that the illegitamate children of the latter is only entitled to
of the legitimate child.
In its answer Insular said that they disqualified Eva as beneficiary when they
ascertained that she was not the legal wife and divided the proceeds among
the illegitamate child of loreto as designated benificiaries. They claimed that
they are bound to honor the insurance policies pursuant to Sec 53 of
Insurance Code.
On the part of Grepalife they alleged that Eva was not designated as
beneficiary and that the claim of the illegitimate child of Loreto was denied
since the latter mispresented his age.
Subsequently the RTC rendered its decision granted the motion to dismiss
incorporated in the answer.
ISSUE: Whether the illegimate child of Loreto are entitled to insurance
proceeds as the designated beneficiary.
Held:
Who is entitled to receive proceeds from insurance policy
SECTION 53 of the Insurance Code The insurance proceeds 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
Accordingly [t]he only persons entitled to claim the insurance proceeds are:
1. The insured, if still alive; or

2. The beneficiary, if the insured is already deceased, upon the

maturation of the policy.20
Exception: Where the insurance contract was intended to benefit third
persons who are not parties to the same in the form of favorable
stipulations or indemnity. In such a case, third parties may directly sue
and claim from the insurer.2

.The revocation of Eva as a beneficiary in one policy and her disqualification

as such in another are of no moment considering that the designation of the
illegitimate children as beneficiaries in Loretos insurance policies remains
valid.The shares of Eva in the insurance proceeds, whether forfeited by the
court in view of the prohibition on donations 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 petitioners.
The proceeds of an insurance policy belong exclusively to the beneficiary
and not to the estate of the person whose life was insured, and that such
proceeds are the separate and individual property of the beneficiary
and not of the heirs of the person whose life was insured.
Instance when the proceeds will redound to the benefit of the
estate.
1. insured has not designated any beneficiary
2. the designated beneficiary is disqualified by law to receive the proceeds,