2013 (Mercantile Law) Bar Exam Questions: Essay Question 2

[Answer/discuss the question below. Or check Mercantile Law Instructions; Mercantile Law Essay Questions: 13, 4, 5, 6, 7, 8, 9 and 10; Mercantile Multiple Choice Questions: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 and 15; See also 2013 Bar Exam: Information, Discussions, Tips, Questions and Results]


Benny applied for life insurance for Php1.5 Million. The insurance company approved his application and issued an insurance policy effective Nov. 6, 2008. Benny named his children as his beneficiaries. On April 6, 2010, Benny died of hepatoma, a liver ailment.

The insurance company denied the children’s claim for the proceeds of the insurance policy on the ground that Benny failed to disclose in his application two previous consultations with his doctors for diabetes and hypertension, and that he had been diagnosed to be suffering from hepatoma. The insurance company also rescinded the policy and refunded the premiums paid.

Was the insurance company correct? (8%)


  1. Yes, there was concealment then I discussed the test of materiality. The incontestability clause will not apply since less than 2 years pa lang from the issuance of insurance policy on Nov. 6, 2008 upto the time of death on April 6, 2010

  2. the insurance company is correct in rescinding the contract but it may not return the insurance premium( died more than 1 year, not required to refund the premium anymore–from a certain case)

    1. Hindi naman issue yung return ng premium pre. Ibig mo sabihin tol, kahit kusang loob na isinoli ng insurance company yung premium di na pwede? Di naman siya pinilit na magsoli.

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