Sunlife vs. CA, 245 SCRA 268 (1995)

FACTS:

On April 15, 1986, Bacani procured a life insurance contract for himself from Sun Life. He was issued a life insurance policy with double indemnity in case of accidental death. The designated beneficiary was his mother, Bernarda. On June 26, 1987, the insured died in a plane crash. Bernarda Bacani filed a claim with Sun Life, seeking the benefits of the insurance. 

Sun Life rejected the claim on the ground that the insured did not disclose material facts relevant to the issuance of the policy, thus rendering the contract of insurance voidable. A check representing the total premiums paid in the amount of P10,172.00 was attached to said letter. Sun Life discovered that 2 weeks prior to his application, Bacani was examined and confined at the Lung Center of the Philippines, where he was diagnosed for renal failure. During his confinement, the deceased was subjected to urinalysis, ultrasonography and hematology tests.  Sunlife claimed that the insured gave false statements in his application when he answered the following questions:

Within the past 5 years have you: a)consulted any doctor or other health practitioner? b)submitted to.

Bernarda and her husband filed an action for specific performance against Sun Life.  RTC ruled for Bernarda holding that the facts concealed by the insured were made in good faith and under the belief that they need not be disclosed. Moreover, it held that the health history of the insured was immaterial since the insurance policy was “non-medical.”   CA affirmed.

ISSUE:

Whether concealment and misrepresentation  was made in “good faith” and the facts concealed or misrepresented were irrelevant since the policy was “non-medical.”

NO. The terms of the contract are clear. The insured is specifically required to disclose to the insurer matters relating to his health. The information which the insured failed to disclose were material and relevant to the approval and issuance of the insurance policy. “Good faith” is no defense in concealment. The insured’s failure to disclose the fact that he was hospitalized for two weeks prior to filing his application for insurance, raises grave doubts about his bona fides. It appears that such concealment was deliberate on his part.

It is well settled that the insured need not die of the disease he had failed to disclose to the insurer. It is sufficient that his non-disclosure misled the insurer in forming his estimates of the risks of the proposed insurance policy or in making inquiries.

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