Insurable Interest: A Requirement for a Valid Insurance Contract

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Alburo Law
May 01, 2026

AT A GLANCE

Insurable interest refers to the legal or pecuniary interest of a person in the subject of the insurance such that he will derive benefit from its preservation or suffer loss from its destruction.

What is insurable interest?

Under the Insurance Code of the Philippines, insurable interest is an essential element of an insurance contract.

Insurable Interest in Life Insurance

Section 10 of the Insurance Code provides that every person has an insurable interest in the life and health:

  1. Of himself, of his spouse and of his children;

  2. Of any person on whom he depends wholly or in part for education or support, or in whom he has a pecuniary interest;

  3. Of 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; and

  4. Of any person upon whose life any estate or interest vested in him depends.

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Since General Ligot, et al., Paragas, and Yambao failed to adduce sufficient proof to rebut the presumption, the properties in Civil Case No. 0197 were properly forfeited in favor of the government. Moreover, General Ligot was a public officer, acquired a considerable amount of money during his tenure, and the amassed bank deposits and investment accounts traceable to him were manifestly disproportionate to his lawful income. Since General Ligot, et al. failed to controvert the presumption, the bank deposits and investment accounts were likewise forfeitable in favor of the Republic.

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