Lalican vs. Insular Life Assurance Company; G.R. No. 183526. August 25, 2009.
Eulogio applied for a 20 year insurance policy with Insular Life. Violeta, petitioner, was named as the primary beneficiary. However, Eulogio failed to pay the premium therefore, the insurance lapsed and became void.
On September 17, 1998, Eulogio applied for reinstatement and paid the overdue premium and interest to Malaluan, agent. On the same day, just hours after filing his Application died of cardio-respiratory arrest secondary to electrocution. The next day, Without knowing of Eulogio’s death, Malaluan forwarded to Insular Life Eulogio’s second Application for Reinstatement of Policy No. 9011992 and P17,500.00 deposit for approval.
On 28 September 1998, Violeta filed with Insular Life a claim for payment of the full proceeds of Policy No. 9011992. Insular Life denied the claim since at the time of Eulogio’s death, Policy No. 9011992 had already lapsed, and Eulogio failed to reinstate the same. The policy would only be considered reinstated upon approval of the application by Insular Life during the applicant’s “lifetime and good health,”
Violeta filed with the RTC, a Complaint for Death Claim Benefit. The RTC denied her claims and held into account the clear provisions of the Policy Contract between Eulogio and Insular Life. There is nothing in the contract that would justify a conclusion that such receipt amounted to an automatic reinstatement of the policy that has already lapsed. As correctly pointed out by [Insular Life] there was no more application to approve because the applicant was already dead and no insurance company would issue an insurance policy to a dead person.”
Violeta argues that RTC should have construed the provisions of the Policy Contract and Application for Reinstatement in favor of the insured Eulogio and against the insurer Insular Life, and considered the special circumstances of the case, to rule that Eulogio had complied with the requisites for the reinstatement of Policy No. 9011992 prior to his death, and that Violeta is entitled to claim the proceeds of said policy as the primary beneficiary thereof.
WON Eulogio was able to reinstate the lapsed insurance policy on his life before his death on 17 September 1998.
NO. Eulogio’s death rendered impossible full compliance with the conditions for reinstatement of Policy No. 9011992. True, Eulogio, before his death, managed to file his Application for Reinstatement and deposit the amount for payment of his overdue premiums and interests thereon with Malaluan; but Policy No. 9011992 could only be considered reinstated after the Application for Reinstatement had been processed and approved by Insular Life during Eulogio’s lifetime and good health.
The conditions for reinstatement under the Policy Contract and Application for Reinstatement were written in clear and simple language, which could not admit any meaning or interpretation other than those that they so obviously embody. A construction in favor of the insured is not called for, as there is no ambiguity in the said provisions in the first place. The words thereof are clear, unequivocal, and simple enough so as to preclude any mistake in the appreciation of the same.
While it is a cardinal principle of insurance law that a policy or contract of insurance is to be construed liberally in favor of the insured and strictly as against the insurer company, yet, contracts of insurance, like other contracts, are to be construed according to the sense and meaning of the terms, which the parties themselves have used. If such terms are clear and unambiguous, they must be taken and understood in their plain, ordinary and popular sense.
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