MARLITO V. MEDINA INSURANCE QUIZ NO.

2 III-A

1. The contention of the Petitioner is untenable. The law provides that an insurance premium is
the consideration paid an insurer for undertaking to indemnify the insured against a specified
peril. In fire, casualty and marine insurance, the premium becomes a debt as soon as the
risk attaches. The earthquake shock endorsement rider to be effective all properties covered must
be paid. In the subject policy, no premium payments were made with regard to earthquake shock
coverage except on the two swimming pools. In this case there is no mention of any premium
payable for the other resort properties with regard to earthquake shock therefore the case should
be without merit.

2. The Petitioners contention not correct. The law provides that a health care agreement is in
the nature of non-life insurance, which is primarily a contract of indemnity. Once the member
incurs hospital, medical or any other expense arising from sickness, injury or other stipulated
contingent, the health care provider must pay for the same to the extent agreed upon under the
contract and payment should be made to the party who incurred the expenses. Hence the
incontestability clause will apply and upon its expiration the defense of concealment or
misrepresentation no longer lie.

3. Yes, the claim of Pascuala will prosper. The law provides that Common-law spouses are
forbidden from receiving any donation and cannot be named beneficiary of a life insurance
policy. A life insurance policy is no different from a civil donation insofar as the beneficiary is
concerned. Both are founded upon the same consideration: liberality. A beneficiary is like a
donee, because from the premiums of the policy which the insured pays out of liberality, the
beneficiary will receive the proceeds or profits of said insurance. In this case the beneficiary is a
common-law spouse and therefore cannot claim such proceeds, it is only Pascuala who can claim
since he is the legal wife of the deceased.

4. The award of the moral and exemplary damages may or may not be modified depending on
the circumstance. The law provides exemplary damages shall be awarded by the court in case of
breach of contract, there must be a showing that the breach was wanton and deliberately
injurious or the one responsible acted fraudently or in bad faith. Furthermoore, in moral damages
no proof of pecuniary loss is necessary in order that moral damages may be adjudicated, the
assessment of which is left to the discretion of the court according to the circumstances of each
case. In this case the if the court finds that the petitioner acted wanton, oppressive or malevolent
manner then exemplary damage should be awarded if not then it should not be included in the
award. As to moral damages it will depend on the actual damages caused by the petitioner to the
defendant, it is the duty of the court to make findings of fact and that would justify the grant of
such award.