Commercial Law, 2018 Bar — Question VI-a

ESSAY

Shortly after Yin and Yang were wed, they each took out separate life insurance policies on their lives, and mutually designated one another as sole beneficiary. Both life insurance policies provided for a double indemnity clause, the cost for which was added to the premium rate. During the last 10 years of their marriage, the spouses had faithfully paid for the annual premiums over the life policies from both their salaries. Unfortunately, Yin fell in love with his officemate, Yessel, and they carried on an affair. After two years, their relationship bore them a daughter named Yinsel. Without the knowledge of Yang, Yin changed the designation of the beneficiary to an “irrevocable designation” of Yinsel and Yessel jointly. When Yang learned of the affair, she was so despondent that, having chanced upon Yin and Yessel on a date, she rammed them down with the car she was driving, resulting in Yin's death and Yessel's complete loss of mobility. Yang was sued for parricide, and while the case was pending, she filed a claim on the proceeds of the life insurance of Yin as irrevocable beneficiary, or at least his legal heir, and opposed the claims on behalf of Yessel and her daughter Yinsel. Yang claimed that her designation as beneficiary in Yin's life insurance policy was irrevocable, in the nature of “one coupled with interest,” since it was made in accordance with their mutual agreement to designate one another as sole beneficiary in their respective life policies. She also claimed that the beneficiary designation of Yessel and the legitimate minor child Yinsel was void, being the product of an illicit relationship and therefore without “insurable interest.” (a) Is Yang correct in saying that her designation as beneficiary was irrevocable?

You can write freely without an account. Sign in to reveal the suggested answer and track your progress.