VIOLETA LALICAN VS INSULAR LIFE ASSURANCE COMPANY DOCTRINE:
"The stipulation in a life insurance policy giving the insured the privilege to reinstate it upon written application does not give the insured absolute right to such reinstatement by the mere filing of an application. The insurer has the right to deny the reinstatement if it is not satisfied as to the insurability of the insured and if the latter does not pay all overdue premium and all other indebtedness to the insurer. After After the death of the insured the insurance Company cannot be compelled to entertain an application for reinstatement of the policy because the conditions precedent to reinstatement reinstatement can no longer be determined determined and satisfied." FACTS:
Eulogio the husband of plaintiff applied for an insurance policy with respondent through malaluan its agent, which contained a 20!ear 20!ear Endowment ariable ariable #ncome $ac%age &le'i $lan worth $(00,000.00 with two riders valued at $(00,000.00 each, wherein, the plaintiff is named as the primary beneficiary of the said policy. )nder the terms, Eulogio is re*uired to pay the premiums on a *uarterly basis basis in the amount of +,02 +,02 of each year until the end of the 20year 20year period of the policy. policy. #ncluded in the terms terms is a grace period of - days for the payment payment of each premium subse*uent subse*uent to the first. #f any premium was not not paid on or before the due due date, the policy would be in in default, and if the premium remained remained unpaid until the the end of the grace period, the policy would automatically lapse and become void. Eulogio failed to pay the - rd premium which was due on /anuary even after the lapse of the grace period. ence, it became void. void. Eulogio as a remedy he filed filed an Application Application for 1einstatement together with the amount of $+,02.00 to pay for the premium due on 2 /anuary 33+. owever, this was not processed since he left unpaid the overdue interest thereon amounting to $-22.+. Thus, #nsular 4ife instructed Eulogio to pay the amount of interest and to file another application for reinstatement and Eulogio was li%ewise advised by 5alaluan to pay the premiums that subse*uently became due on 2 April 33+ and 2 /uly 33+, plus interest. 6n 7 8eptember 33+, eulogio submitted his 2 nd application for reinstatement in the amount of 7,(00 which was instead received by the husband of malaluan since she was on a business errand, A receipt receipt was issued for the amount a mount deposited by eulogio. 6n sept 7, 33+ eulogio died of cardiorespiratory arrest. 9ithout %nowing of Eulogio:s death, death, nd 5alaluan forwarded to the #nsular 4ife the 2 application of reinstatement and the amount of 7,(00. This application was not acted upon anymore since insular life was already informed by the death on sept 2, 33+. $laintiff filed with #nsular 4ife a claim for payment of the full proceeds of the $olicy of his husband. The respondent denied the claim on the ground that the policy has already lapsed and there was failure to reinstate. $laintiff re*uested for a reconsideration of the disallowance over the claim. This was also denied. 6n august , 333 #nsular 4ife responded a demand letter of the plaintiff by agreeing agreeing to conduct a reevaluation reevaluation of ioleta: ioleta:ss claim. 9ithout 9ithout waiting for the reevaluation the plaintiff filed a complaint in the 1TC for death claim benefit. The court court however ruled in favor of of respondent on the ground ground that the $olicy had indeed lapsed and Eulogio needed to have the same reinstated
ISSUE: WON E)46;#6 9A8 A<4E T6 1E#=8TATE TE 4A$8E> #=8)1A=CE $64#C! EAT HELD: No, The $olicy had already lapsed is a fact beyond dispute. Eulogio:s filing of his Application for 1einstatement with #nsular 4ife constitutes an admission that $olicy had lapsed.
To reinstate a policy means to restore the same to premiumpaying status after it has been permitted to lapse.
Application for 1einstatement and accompanying deposits, for processing and approval by the latter. Eulogio:s death, Dust hours after filing his Application for 1einstatement and depositing his payment for overdue premiums and interests with 5alaluan, does not constitute a special circumstance that can persuade this Court to already consider $olicy =o. 30332 reinstated. 8aid circumstance cannot override the clear and e'press provisions of the $olicy Contract and Application for 1einstatement, and operate to remove the prerogative of #nsular 4ife thereunder to approve or disapprove the Application for 1einstatement. Even though the Court commiserates with ioleta, as the tragic and fateful turn of events leaves her practically emptyhanded, the Court cannot arbitrarily burden #nsular 4ife with the payment of proceeds on a lapsed insurance policy. /ustice and fairness must e*ually apply to all parties to a case. Courts are not permitted to ma%e contracts for the parties. The function and duty of the courts consist simply in enforcing and carrying out the contracts actually made. Eulogio:s death, Dust hours after filing his Application for 1einstatement and depositing his payment for overdue premiums and interests with 5alaluan, does not constitute a special circumstance that can persuade this Court to already consider $olicy =o. 30332 reinstated. 8aid circumstance cannot override the clear and e'press provisions of the $olicy Contract and Application for 1einstatement, and operate to remove the prerogative of #nsular 4ife thereunder to approve or disapprove the Application for 1einstatement. Even though the Court commiserates with ioleta, as the tragic and fateful turn of events leaves her practically emptyhanded, the Court cannot arbitrarily burden #nsular 4ife with the payment of proceeds on a lapsed insurance policy. /ustice and fairness must e*ually apply to all parties to a case. Courts are not permitted to ma%e contracts for the parties. The function and duty of the courts consist simply in enforcing and carrying out the contracts actually made. THEREFORE, Polic No -.//--0 #!($in!d l$'"!d $nd )oid
