Meaning Of "Nearest Relative" In Life Insurance

Category: Law on Insurance

Meaning Of "Nearest Relative" In Life Insurance

Section 12. The interest of a beneficiary in a life insurance policy shall be forfeited when the beneficiary is the principal, accomplice or accessory in willfully bringing about the death of the insured; in which event, the nearest relative of the insured shall receive the proceeds of said insurance if not otherwise qualified.

Who are the “nearest relatives” mentioned here?

Those related to the decedent in the order mentioned under the rules of intestate succession such as: (the order of the following relatives are as follows)

1.       The legitimate children;

2.       The father and mother, if living;

3.       The grandfather and grandmother; or ascendants nearest in degree, if living;

4.       The illegitimate children;

5.       The surviving spouse; and

6.       The collateral relatives, to wit:

a.       Brothers and sisters of the full blood;

b.       Brothers and sisters of the half-blood; and

c.       Nephews and nieces

7.       In default of the above, the STATE shall be entitled to receive the insurance proceeds.

Problem:

Clark is insured.  His nearest relatives are:

1) Anakin, the legitimate child

2) Jor-el and Kyla, the legitimate father and mother

3) Lolo and Lola, grandfather and grandmother (or ascendants in the nearest degree)

4) Bastardo, the illegitimate child

5) Lois Lane, the surviving spouse

6) Collateral relatives to wit:

a) Kuya, brother of full blood

b) Alf, brother of half blood

c) Nep, nephew

What if all of the above are nowhere to be found?

Then the State of Krypton is entitled to the proceeds.

Suppose that Lois Lane masterminded a plan to kill Clark and Anakin carried it out.  Anakin and Lois were convicted of murder.  However, they are also instituted as beneficiaries in the insurance policy of Clark, and the proceeds are the only properties available for distribution to the heirs.  In case all three are convicted who gets the proceeds?

Since Anakin, the legitimate child and Lois, the surviving spouse are no longer entitled to the proceeds, then following the rules on intestate succession, the proceeds must be divided between the legitimate parents (Jor-el and Kyla) who get ½ of the proceeds and the Illegitimate child (Bastardo) who gets the other half.

Same facts above, but it was only Lois Lane who was instituted as beneficiary.  Is Anakin still entitled to the insurance proceeds?

At first glance the answer might be YES, because according to Section 12, it is only the interest of the beneficiary which is forfeited, and since Anakin was not instituted as beneficiaries, then his interest is still intact.  HOWEVER, there is a proviso in Sec. 12, which states: ” the nearest relative of the insured shall received the proceeds of said insurance if not otherwise qualified”.   Meaning, in order to find out if Anakin is qualified, reference must be made to laws of succession.

According to Art. 1024 of the CC, the provisions relating to incapacity by will are equally applicable to intestate succession; and according to Art. 1032 (2), any person who has been convicted of an attempt against the life of the testator is incapable of succeeding by reason of unworthiness.  Hence, the correct answer to this problem is NO.  Anakin is not entitled to the proceeds and subsequently the insurance proceeds will be divided as provided for in the first answer.

In case Anakin and Lois are not convicted, but both are instituted as beneficiaries of Clark, can they still collect the proceeds?

There is no law or jurisprudence that treats of this situation.  There must be a conviction before Sec. 12 can operate to disqualify or forfeit the interests of Anakin and Lois.  Sec. 12 speaks of “principals, accomplice or accessory”, and there must therefore be a conviction of the beneficiaries as either of the three to the crime against the insured.

Suppose Anakin and Lois are not convicted and they are not instituted as beneficiaries of Clark, can they now collect the proceeds?

In this case, Sec. 12 is no longer the relevant provision, but Art. 1032 (2) of the CC.  However, it is submitted (by JohnBee Sioson) that there must be a final conviction in order for Art. 1032 to apply, i.e., to bar Anakin and Lois from collecting on the ground of unworthiness.  Furthermore, Art. 1034 says: In order to judge the capacity of the heir, devisee or legatee, his qualifications at the time of the death of the decedent shall be the criterion.  In cases falling under Nos. 2, 3 & 5 of Art. 1032, it shall be necessary to wait until final judgment is rendered.

Elle Driver, Beatrix Kiddo & O-Ren Ishi are all creditors of Bill.  All three are instituted as beneficiaries of Bill.  Elle fails to qualify since she is Bill’s concubine.  Beatrix on the other hand, eager to claim the insurance proceeds, used the “5 point exploding heart technique” she learned from Pai Mei, killing Bill. O-Ren now claims the proceeds of the insurance.  However, her claim is opposed by BB, Bill’s legitimate daughter who contends that according to Sec. 12, it is the nearest relative who should get the proceeds, meaning her.  Between BB and O-Ren, who is entitled to get the proceeds?

O-Ren Ishi gets the proceeds because it was stipulated in the contract of insurance (I think she’ll use it to surgically graft her scalp back since it was sliced by Beatrix using a Hatori Hanzo Sword).  Remember that the insurance contract is the law between the parties and hence it must be followed by the insurance company.  Sec. 12 ONLY applies if there is NO stipulation in the contract of insurance as to who are the other beneficiaries of the proceeds.