Concealment in Insurance

Concealment is a “neglect to communicate that which a party knows and ought to communicate.”[1] Thus, each party is required to communicate in good faith to the other all facts within his knowledge which are material to the contract and as to which he makes no warranty, and which the other has not the means of ascertaining.[2]

Best Legal Practices:

Disclose as much as possible – As a contract of insurance is one of uberrimae fidae (utmost good faith), each party should disclose as much as possible any relevant information.

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Insurable Interest

What constitutes insurable interest in life and health insurance

Every person has an insurable interest in the life and health of:[1]

  1. Himself, of his spouse, and of his children;[2]
  2. Any person on whom he depends wholly or in part for education or support, or in whom he has a pecuniary interest;[3]
  3. Any person under a legal obligation to him for the payment of money, or respecting property or services, of which death or illness might delay or prevent the performance;[4] and
  4. Any person upon whose life any estate or interest vested in him depends.[5]

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Concept of Insurance

A contract of insurance is “an agreement whereby one undertakes for a consideration to indemnify another against loss, damage or liability arising from an unknown or contingent event.”[1]

Within the meaning of the Insurance Code, a contract of suretyship is deemed as an insurance contract “only if made by a surety who or which, as such, is doing an insurance business as hereinafter provided.”[2]

Best Legal Practices:

Safekeeping insurance contract or policy is highly recommended – As an insurance contract or policy is one that requires to be in writing, safekeeping the same is highly recommended considering it is the best evidence available.

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