Commercial Law, 2018 Bar — Question XIV-a

ESSAY

On June 21, 2008, Yate took out a life insurance policy on her life in the amount of PhP10 million and named her husband Yandy and daughter as joint irrevocable beneficiaries. Before the policy was issued and the premiums were paid, Yate underwent a medical checkup with a physician accredited by the insurer, and the only result found was that she was suffering from high blood pressure. Yate was previously diagnosed by a private physician of having breast cancer which she did not disclose to the insurer in her application, nor to the insurer's accredited physician, because by then she was told that she was already cancer-free after undergoing surgery which removed both her breasts. She was later diagnosed with a psychotic tendency that graduated into extreme despondency. She was found dead hanging in her closet 36 months after the issuance of the policy. The police authorities declared it to be a case of suicide. The policy did not include suicide as an excepted risk. (a) Can the insurer raise the issue of failure to disclose that she had cancer as a cause for denying the claim of the beneficiaries?

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