Mistresses are disqualified from being beneficiaries

ALTHOUGH the law prohibits the designation of the insured’s mistress as beneficiary in his insurance policy, there is no law proscribing the same with respect to his illegitimate children. Where they are the named beneficiaries, the disqualified mistress’s share accrues to the latter and not to the insured’s estate or legal heirs.

Before he died, the deceased took out two life insurance policies and designated his mistress and their three illegitimate children as his beneficiaries. After his death, some of the proceeds were released to them.

Wishing to have the insurance proceeds revoked, his legitimate wife and children filed a case with the Regional Trial Court (RTC). They alleged that his mistress was disqualified from receiving any proceeds pursuant to the prohibition under Art. 739 of the Civil Code on void donations and moreover, was a suspect in the killing of the deceased.

In their defense, the insurance companies involved claimed that the deceased had misrepresented his mistress and illegitimate children to be his legitimate family. But after ascertaining that she was not the legal wife, one of the companies disqualified her while the insured himself had earlier revoked her designation as beneficiary in the insurance policy with the other company. Hence, her share was divided among the other beneficiaries, i.e., their illegitimate children.

The complainants considered this erroneous since under Sec. 12 of the Insurance Code, the share of the mistress, who was accused of killing the insured, should redound to the legal heirs. The provision reads:

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 disqualified.

The insurance companies countered that under Art. 53 of the same law, insurance proceeds belong exclusively to the beneficiaries named in the policies, if not otherwise disqualified.

Both the RTC and Court of Appeals ruled in favor of the illegitimate children and insurance companies. It affirmed the latter’s argument entirely and held that it is only when there are no beneficiaries, or if they are disqualified, that the insurance proceeds shall accrue to the insured’s estate.

In agreeing with the lower courts, the Supreme Court held:

The revocation of ( the mistress) 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 (insured’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 ( the mistress) 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 (Heirs of Maramag v. De Guzman, et al., G. R. No. 181132, 5 June 2009, J. Nachura).