1. Alejandro takes out an insurance on his own life and names his friend Juan as beneficiary.

Alejandro then takes another insurance on Juan's life with himself as beneficiary.

With respect to the first insurance contracted by Alejandro on his own life and naming Juan as
beneficiary, it is valid. With respect to the second insurance contracted by Alejandro on Juan’s life
naming himself as beneficiary, it is not valid as he does not have any insurable interest on Juan’s life.
Sec. 10 of the Insurance Code exclusively provides the list of persons who qualify as those with insurable
interest in their life and health. In this case, Alejandro, being merely a friend of Juan, does not have any
insurable interest with the life and health of the latter.

2. Mario, married to Luna, is cohabiting with Elena. Mario takes out an insurance on his life and
designates Elena as his beneficiary.

No. Under Art. 2012 of the New Civil Code, “Any person who is forbidden from receiving any donation
under Art. 739 cannot be named beneficiary of a life insurance policy and by the person who cannot
make any donation to him.” Accordingly, Art. 739 provides that “donations made between persons who
were guilty of adultery or concubinage at the time of donation shall be void.” The case of Insular Life
Assurance vs Ebrado (GR No L-44059, Oct. 28 1997) dictates that a husband cannot validly designate as
beneficiary a woman with whom he had illicit relations. Conviction is not necessary in order for one to
be disqualified due to adultery or concubinage.

3. Juliet took out an insurance policy on the life of her boyfriend, Romeo. In the insurance
application, Juliet misrepresented that Romeo was in perfect health although she knew that
Romeo was afflicted with lung cancer after having been smoking tobacco for decades. Romeo
eventually died in a car crash. Juliet later on filed her insurance claim.

No. Contracts of Insurance are uberrimae fidae and demand utmost good faith. Under Sec. 27 of the
Insurance Code, "a concealment entitles the injured party to rescind a contract of insurance." However,
the fraudulent intent on the part of the insured must be established to entitle the insurer to rescind the
contract. Misrepresentation as a defense of the insurer to avoid liability is an affirmative defense and
the duty to establish such defense by satisfactory and convincing evidence rests upon the insurer.

4. Sisa insures the life of Basilio, her son who is no longer a minor and who is now married.

No. Sisa does not have an insurable interest over the life of her son anymore, as contemplated under
Sec. 10 of the Insurance Code, paragraph (a) which states “Of himself, of his spouse, and of his children.”
The word “children” presupposes minority. If the law intended to include children who are not of minors
anymore, the framers of the law should have used “descedent.” Thus, for want of insurable interest, Sisa
cannot validly insure the life of Basilio.

5. Jose insured the life of his wife, Josephine. Later they were legally separated pursuant to a
judgment of a court. (Specific instructions: You will be expected to give 2 answers. Thus, the
General instructions above will apply to each)
 (A) Josephine later dies after the legal separation due to myocardial infarction. Can Jose
recover? *

(B) Will your answer be the same if Jose insured the life of Josephine when they were already
legally separated? *

(a) Yes, Jose can recover. The decree of legal separtion from the court does not carry with it the
extinction of the insurance contract validly entered into. At best, it only gives the offended spouse a
right to revoke the designation of the offending spouse as a beneficiary in the said insurance contract. In
this case, there was no mention that a revocation transpired and thus, Jose may validly recover.

(b) Yes, my answer will be the same. The decree of legal separation does not completely sever the
marital bonds created through a special contract of marriage. Under the eyes of the law, they are still
validly married and spouses to each other. Thus, Jose still has an insurable interest over Josephine’s life
and health, and may validly recover.