Is naming a partner other than the legal spouse of a married person as a beneficiary to life insurance allowed?
The short answer is no. An illicit or secret lover, such as a mistress or a paramour, is disqualified from receiving the proceeds of a life insurance policy of a married individual.
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Life insurance as a financial product
Life insurance is a financial product meant to protect those that will suffer when a breadwinner passes away and to pass on a legacy. It can be a shield against an unexpected death of the insured. Those that are left behind may be designated as life insurance beneficiaries are given an amount equivalent to the value of the life insurance policy.
Thus it makes sense that generally, it is purchased for the people who mean a lot to the insured.
These are people who may not only suffer grief at the death of the insured but also financial hardship. They might face difficulties due to the loss of income of their provider. These can include dependents such as adult or minor children as life insurance beneficiaries, including naming illegitimate children as beneficiaries of the policy.
Aside from the kids, another common beneficiary is the legal spouse.
Illicit partner as life insurance beneficiary
But what about illicit partners?
A female or male lover of a legally married person cannot become beneficiaries of a life insurance policy. That is so because insurance as a contract is governed by special laws and of the Civil Code. In Article 2011 of the Civil Code states: “The contract of insurance is governed by special laws. Matters not expressly provided for in such special laws shall be regulated by this Code.”
The Civil Code also further states in Article 2012, “Any person who is forbidden from receiving any donation under article 739 cannot be named beneficiary of a life insurance policy by the person who cannot make any donation to him…”
Article 739. The following donations shall be void;
(1) Those made between persons who were guilty of adultery or concubinage at the time of the donation;
(2) Those made between persons found guilty of the same criminal offence, in consideration thereof;
(3) Those made to a public officer or his wife, descendants and ascendants, by reason of his office.
Civil Code of the Philippines
In the case G.R. No. 181132, illegitimate children and their mother were designated beneficiaries of a married man’s life insurance policy. The man died, and the legal spouse sued against issuing the proceed of the plan to the named beneficiaries.
In the ruling, the illicit partner was disqualified from receiving the death benefit, which was awarded to the illegitimate children who were named beneficiaries and deemed qualified to get the proceed.
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 of the Philippines, G.R. No. 181132
Additional references on this matter are the opinion of the Insurance Commission (Can a woman married to a legally married man be named as a beneficiary in the life insurance policy of the latter and claim the proceeds thereof in case of death of the latter?) and Supreme Court ruling in G.R. No. L-44059 October 28, 1977.