Article 58p. 58

COMMERCIAL LAWS NEGOTIABLE INSTRUMENTS, CORPORATION, INSURANCE, TRANSPORTATION, BANKING

deducted from any amount payable under the policy in

settlement;

(b) A provision that the policy shall be incontestable

after it has been in force during the lifetime of the insured

for a specified period, not more than two (2) years from its

date of issue, except for nonpayment of premiums and

except for violation of the conditions of the policy relating

to naval or military service, or services auxiliary thereto,

and except as to provisions relating to benefits in the

event of disability as defined in the policy, and those

granting additional insurance specifically against death

by accident or by accidental means, or to additional

insurance against loss of, or loss of use of, specific

members of the body;

(c) A provision that the policy shall constitute the

entire contract between the parties, or if a copy of the

application is endorsed upon and attached to the policy

when

issued,

a

provision

that

the

policy

and

the

application therefor shall constitute the entire contract

between the parties, and in the latter case, a provision

that all statements made by the insured shall, in the

absence of fraud, be deemed representations and not

warranties;

(d) A provision that if the age of the person insured, or

the age of any person, considered in determining the

premium, or the benefits accruing under the policy, has

been misstated, any amount payable or benefit accruing

under the policy shall be such as the premium paid

would have purchased at the correct age;

(e) A provision that if the policy is a participating

policy,

the

company

shall periodically ascertain and

apportion any divisible surplus accruing on the policy

under the conditions specified therein;

(f) A provision that in the event of default in premium

payments after three (3) full years' premiums have been

paid, the policy shall be converted into a stipulated form

of insurance, and that in the event of default in premium

payments after five (5) full years' premiums have been

paid, a specified cash surrender value shall be available, in

lieu of the stipulated form of insurance, at the option of

the policyholder. The net value of such stipulated form of

insurance and the amount of such cash value shall not be

less than the reserve on the policy and dividend additions

thereto, if any, at the end of the last completed policy year

for which premiums shall have been paid (the policy to

specify the mortality table, rate of interest and method of

valuation adopted to compute such reserve), exclusive of

any reserve on disability benefits and accidental death

benefits, less an amount not to exceed two and one-half

percent (2 1/2%) of the maximum amount insured by the

policy and dividend additions thereto, if any, when the

issue age is under ten (10) years, and less an amount not

to exceed two and one-half percent (2 1/2%) of the current

amount insured by the policy and dividend additions

thereto, if any, if the issue age is ten (10) years or older,

and less any existing indebtedness to the company on or

secured by the policy;

(g) A provision that the policy may be surrendered to

the company at its home office within a period of not less

than sixty (60) days after the due date of a premium in

default for the specified cash value: Provided, That the

insurer may defer payment for not more than six (6)

months after the application therefor is made;

(h) A table that shows in figures the nonforfeiture

benefits available under the policy every year upon

default in payment of premiums during at least the first

twenty (20) years of the policy, such table to begin with

the year in which such values become available, and a

provision that the company will furnish upon request an

extension of such table beyond the year shown in the

policy.

(i)

A

provision

that

specifies

which

one

of the

stipulated forms of insurance provided for under the

provision of paragraph (f) of this section shall take effect

in the event of the insured's failure, within sixty (60) days

from the due date of the premium in default, to notify the

insurer in writing as to which one of such forms he has

selected;

(j) A provision that the policy may be reinstated at any

time within two (2) years from the due date of the

premium in default unless the cash surrender value has

been paid or the period of extended term insurance

expired,

upon

production

of evidence of insurability

satisfactory to the company and payment of arrears of

premiums with interest at a rate not exceeding six

percent (6%) per annum payable annually;

(k) A provision that when a policy shall become a

claim by death of the insured, settlement shall be made

upon receipt of due proof of death, or not later than two

(2) months after receipt of such proof;

(l) A title on the face and on the back of the policy

correctly describing its form;

(m) A space on the front or the back of the policy for

the name of the beneficiary designated by the insured

with a reservation of the insured's right to designate or

change the beneficiary after the issuance of the policy.

The policy may also provide that no designation or

change of beneficiary shall be binding on the insurer

until endorsed on the policy by the insurer, and that the

insurer may refuse to endorse the name of any proposed

beneficiary who does not appear to the insurer to have an

insurable interest in the life of the insured. Such policy

may also contain a provision that if the beneficiary

designated in the policy does not surrender the policy

with due proof of death within the period stated in the

policy, which shall not be less than thirty (30) days after

the death of the insured, or if the beneficiary is the estate

of the insured, or is a minor, or dies before the insured, or

is not legally competent to give valid release, then the

insurer

may

make

any

payment thereunder to the

executor or administrator of the insured, or to any of the

insured's

relatives

by

blood

or

legal

adoption

or

connections by marriage or to any person appearing to

the insurer to be equitably entitled thereto by reason of

having incurred expense for the maintenance, medical

attention or burial of the insured; and

(n) A provision that when an industrial life insurance

policy is issued providing for accidental or health benefits,

or both, in addition to life insurance, the foregoing

provisions shall apply only to the life insurance portion of

the policy.

Any of the foregoing provisions or portions thereof

not applicable to nonparticipating or term policies shall

to that extent not be incorporated therein. The foregoing

provisions shall not apply to policies issued or granted

pursuant to the nonforfeiture provisions prescribed in

provisions of paragraphs (f) and (i) of this section, nor shall

provisions of paragraphs (f), (g), (h), and (i) hereof be

required in term insurance of twenty (20) years or less but

such term policies shall specify the mortality table, rate of

interest, and method of computing reserves.

SECTION 237. No policy of industrial life insurance

shall be issued or delivered in the Philippines if it contains

any of the following provisions:

(a) A provision that gives the insurer the right to

declare the policy void because the insured has had any

disease or ailment, whether specified or not, or because

the insured has received institutional, hospital, medical or

surgical treatment or attention, except a provision which

gives the insurer the right to declare the policy void if the

insured has, within two (2) years prior to the issuance of

the policy, received institutional, hospital, medical or

surgical treatment or attention and if the insured or the

claimant under the policy fails to show that the condition

occasioning such treatment or attention was not of a

serious nature or was not material to the risk;

(b) A provision that gives the insurer the right to

declare the policy void because the insured has been

rejected for insurance, unless such right be conditioned

upon a showing by the insurer that knowledge of such

© Compiled by RGL

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