A child, legitimate or illegitimate, can be named a beneficiary to a life insurance. A parent who has a child out of wedlock may choose to buy a life insurance naming the latter as one of the beneficiaries.
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Illegitimate child
Naming a child as beneficiary, whether he or she is legitimate or otherwise, is one of the decisions that a parent can make when buying a life insurance.
Children are generally vulnerable especially when their parents meet an untimely death. If they are young kids, they do not have the ability to earn an income. They depend on their primary provider for basic needs such as food, shelter, clothing, education, and others.
Children may suffer deep sorrow at the death of a parent. More than that, they can face financial hardship at a young, tender age. Without the income of their provider, they have limited to no means to find a way to address their daily needs.
Who is considered an illegitimate child?
The answer is in Article 65 of the Family Code of the Philippines that states, “Art. 165. Children conceived and born outside a valid marriage are illegitimate, unless otherwise provided in this Code.”
For some illegitimate children, their reality might also be quite different. They might be in a situation that is beyond their control. For instance, their family life could be complicated or even difficult. Their parents may be involved in a non-harmonious relationship, so they spend less time with one parent than the other.
Additionally, they may be living in a one-parent household, in custody of close relatives, or in a house with step-parents and step-siblings.
Illegitimate child as beneficiary
In the case of parent who is the insured, they are not forbidden by law to name an illegitimate child or children. The Insurance Commission of the Philippines also stated:
“… an individual who has secured a life insurance policy on his or her own life may designate any person as beneficiary provided that such designation does not fall under the enumerations provided in Article 739 of the Civil Code, without prejudice to the application of Section 12 of the Amended Insurance Code.”
Insurance Commission of the Philippines
According to Section 11 of Republic Act No. 10607 (Amended Insurance Code), otherwise known as the Amended Insurance Code, “The insured shall have the right to change the beneficiary he designated in the policy, unless he has expressly waived this right in said policy.”
In Section 53 of RA 10607, “The insurance proceeds shall be applied exclusively to the proper interest of the person in whose name or for whose benefit it is made unless otherwise specified in the policy.”
The Supreme Court ruling in G.R. No. 181132 the interest of illegitimate children when named beneficiaries in a policy was likewise affirmed. In that case, they (and their mother who was not the legal wife) were designated beneficiary to life insurance plan of their father. After the father passed away, their mother was disqualified from receiving her share of the benefits but the claim of the illegitimate children remained valid.
The revocation of Eva as a beneficiary in one policy and her disqualification as such in another are of no moment considering that the designation of the illegitimate children as beneficiaries in Loreto’s insurance policies remains valid. Because no legal proscription exists in naming as beneficiaries the children of illicit relationships by the insured, the shares of Eva in the insurance proceeds, whether forfeited by the court in view of the prohibition on donations under Article 739 of the Civil Code or by the insurers themselves for reasons based on the insurance contracts, must be awarded to the said illegitimate children, the designated beneficiaries, to the exclusion of petitioners.
Supreme Court in G.R. No. 181132
Minors as life insurance beneficiary
Naming a minor as beneficiary has implication to the policy. Minors are not legally capable of entering into a contract. Children younger than 18 years old cannot file a claim to receive death benefit, for instance. They need a legal guardian to do so in their behalf.
An article suggests that the insured name a trustee preferably at the time of the application.
For more details, talk to an expert, lawyer, licensed insurance agent, or insurance company.