Legal basis and coverage
- Act No. 3870 amends Act No. 2427 by adding a separate paragraph at the end of Section 3.
- Act No. 3696 is the immediate prior amendment referenced for Section 3.
- The enabling clause applies to “any minor of the age of eighteen years or more.”
- The clause applies when the contract is for life, health and accident insurance with an insurance company duly licensed to do business in the Philippine Islands.
- The clause applies only when the insurance is taken on the minor’s own life.
- The clause governs the appointment of the beneficiary and allows certain policy-backed borrowing.
Substantive rule on insurance contracting
- A minor of the age of eighteen years or more may, notwithstanding such minority, contract for life, health and accident insurance.
- The insurance must be with an insurance company duly licensed to do business in the Philippine Islands.
- The insurance must be taken on the minor’s own life.
- The beneficiary must be limited to the minor’s estate or any of the following: the minor’s father, mother, husband, wife, child, brother or sister.
Policy borrowing with limitation
- The insured minor may borrow money from the insurance company.
- The borrowing must be with the guaranty of the insurance policy.
- The borrowed amount must not exceed the cash surrender value of the policy.