De Leon vs. The Manufacturers Life Insurance Company (Phils.) Inc.

An insured's change of beneficiary designation in a life insurance policy is effective upon substantial compliance with the policy's stipulated procedure — i.e., accomplishing and signing the insurer's own beneficiary designation form and submitting it to the insurer's authorized agent — even if the insurer's internal rules requiring designation of a trustee for minor beneficiaries were not observed, provided those internal rules are not part of the written insurance contract and the insured was not contractually bound to comply with them.

Edgar H. Sarte (Sarte) was the life insured under three life insurance policies issued by The Manufacturers Life Insurance Company (Phils.) Inc. (Manulife), all owned by Systems Technology, Inc. (STI). During his lifetime, Sarte sired three sets of children with three different women: with his legitimate wife Zenaida S. Sarte (Zenaida), he had Jessica S. Sarte-Gustilo (Jessica) and Edgard Eldon S. Sarte (Eldon); with Vilma C. Caparros (Vilma), he had Edgar Alvin C. Sarte (Alvin) and Edgar Angelo C. Sarte (Angelo); and with Edita De Leon (Edita), he had Lara Bianca L. Sarte (Lara) and Renzo Edgar L. Sarte (Renzo). The three subject policies all carried revocable beneficiaries and were serviced by Manulife agent Betty Alejandro Cepeda (Cepeda), who was authorized to accept beneficiary designation forms on Manulife's behalf. Sarte died on December 23, 2003, leaving conflicting claims among his three families over the policy proceeds, prompting Manulife to file a complaint for interpleader before the Regional Trial Court of Makati City.

Edgar H. Sarte was the life insured under three life insurance policies issued by Manulife, all owned by Systems Technology, Inc. (STI): Policy 1 (No. 4321987-2, ₱1,000,000.00), Policy 2 (No. 4319830-8, ₱1,000,000.00), and Policy 3 (No. 4319831-6, ₱2,000,000.00). The policies originally designated STI and Zenaida Sarte as revocable beneficiaries for Policies 1 and 2, and Edgar Alvin C. Sarte as the sole revocable beneficiary for Policy 3. During his lifetime, Sarte sired three sets of children with three women: with his legitimate wife Zenaida, he had Jessica and Edgard Eldon; with Vilma C. Caparros, he had Alvin and Angelo; and with Edita De Leon, he had Lara Bianca and Renzo Edgar.

On March 1, 2002, Sarte executed his first set of Beneficiary Designation Forms (BDFs), modifying the beneficiaries of the subject policies. For Policy 1, the beneficiaries were changed from STI and Zenaida Sarte to Zenaida Sarte and Jessica Sarte-Gustilo; for Policy 2, from STI and Zenaida Sarte to Zenaida Sarte and Renzo Edgar L. Sarte; and for Policy 3, from Edgar Alvin C. Sarte to Edgar Alvin C. Sarte and Renzo Edgar L. Sarte. These March 1, 2002 BDFs were processed by Manulife and registered in the company's internal records.

On July 31, 2002, Sarte executed a second set of BDFs, further changing the beneficiaries: for Policy 1, from Zenaida and Jessica to Renzo Edgar L. Sarte alone; for Policy 2, from Zenaida and Renzo to Renzo Edgar L. Sarte alone; and for Policy 3, from Alvin and Renzo to Lara Bianca L. Sarte alone. These BDFs were prepared by Sarte's long-time personal and business secretary, Veneranda Canta Gealogo (Gealogo), who witnessed Sarte signing them. Sarte executed these BDFs with the intention that his minor children acquire equal amounts from his insurance policies. The phrase "Nothing Follows" was typewritten beneath the portion where the names of Lara and Renzo were indicated. Gealogo made photocopies of the BDFs, and the originals were delivered by Sarte's messenger, Allan Quiñones, to Betty Alejandro Cepeda (Cepeda), the Manulife servicing agent in charge of the subject policies.

Cepeda admitted receiving the originals of the July 31, 2002 BDFs but observed that the designated beneficiaries, Lara and Renzo, were still minors and that no trustee or individual capacitated to act on their behalf was designated, as required by Manulife's internal company policy. Because "Nothing Follows" was typewritten on the BDFs, such a correction could not be made. Cepeda declined to affix her signature on the BDFs and alleged that she returned them to Sarte through Gealogo. Gealogo denied ever receiving them and testified that Cepeda called her, inquiring as to who should be designated as trustees of the minors. Gealogo claimed to have faxed to Cepeda a tabulation indicating the names of the trustees, but only on January 19, 2004, after Sarte's death on December 23, 2003. Other than the fax transmittal slip, Gealogo had no other proof that she actually faxed the document to Cepeda's office.

Before Sarte died, he gave to Edita the originals of four insurance policies, two of which were Policies 1 and 2, as well as photocopies of the BDFs dated July 31, 2002. Sometime after Sarte's death, Edita met with Cepeda at the latter's office to process the insurance claims on behalf of her children. Cepeda initially denied receiving the BDFs and claimed to have no record of them. A week later, they went to Manulife's office to check the records, accompanied by Gealogo. Edita presented the following documents in support of her claim: an Acknowledgment Receipt of the July 31, 2002 BDFs signed by Cepeda's secretary, Lynn Gagan; the trip report of Allan Quiñones; and a matrix of Sarte's insurance policies and a copy of the tabulation provided to her by Yolanda Domingo, Sarte's executive assistant. Manulife did not release the proceeds to her.

On January 20, 2004, Edita wrote to Manulife's head office seeking assistance for her claim. Manulife's Claims Manager, Jessie Bell Victoriano, responded by mail on February 2, 2004, suggesting that Sarte's three families settle their claims amicably to avoid costly litigation. On March 25, 2004, Zenaida met with Victoriano to inquire into her claims, at which point Victoriano revealed that as per the insurer's records, Zenaida was also named in Policy 1 as co-beneficiary with Renzo. Two months later, Zenaida set another meeting with Victoriano, at which she was informed of Edita's claims on the subject policies. Victoriano testified that the July 31, 2002 BDFs appeared to be valid as they contained Sarte's signature. Because Manulife was in doubt as to the rightful beneficiaries, it filed a complaint for interpleader on August 12, 2004, against Zenaida and Jessica; minor Alvin, represented by his mother Vilma; and minors Lara and Renzo, represented by their mother Edita.

• Non-Binding Nature of Internal Rules: Petitioners argued that Manulife's internal rules requiring the designation of a trustee for minor beneficiaries are not binding upon either Sarte or the petitioners, as these rules do not appear in the subject insurance policies themselves.
• Substantial Compliance with Policy Terms: Petitioners maintained that Sarte had complied with all the requirements of the policy provision on "Change of Beneficiary" by merely filling up and signing Manulife BDFs designating Lara and Renzo and transmitting the same to Cepeda, Manulife's authorized agent.
• Trustee Designation Compliance: Petitioners argued that Sarte had complied with the trustee designation requirement when Gealogo faxed to Cepeda a tabulation with a list of names of trustees, while also maintaining that the BDFs or the policies themselves do not indicate the necessity of a trustee.
• Admissibility of Photocopies: Petitioners implicitly challenged the CA's application of the Best Evidence Rule, as the RTC had already categorically found that Sarte executed the July 31, 2002 BDFs.

• Unsatisfactory Form: Zenaida, Jessica, Vilma, Alvin, and Cepeda argued that since the July 31, 2002 BDFs were not in a form satisfactory to Manulife, owing to the fact that no trustee was designated, no change in beneficiary designation was effected. They maintained that the RTC was correct in ordering Manulife to release the proceeds according to the latter's records.
• Bad Faith of Manulife: Zenaida and Jessica filed a counterclaim against Manulife, arguing that the insurer was in bad faith for filing the complaint for interpleader despite knowing that Zenaida and Jessica are beneficiaries on record for Policies 1 and 2. Alvin similarly argued that the complaint was a frivolous suit as Manulife already knew, based on its records, that he is solely entitled to Policy 3.
• Liability of Cepeda: Lara and Renzo filed a third-party complaint against Cepeda, averring that should the proceeds not be given to them due to Cepeda's failure to register the BDFs, then the latter should be made to pay the amount of the proceeds plus damages. Cepeda countered that Gealogo had ample time from July 31, 2002 until December 23, 2003 to return the BDFs with the necessary corrections but never did, making Gealogo solely to blame.
• Manulife's Neutrality and Entitlement to Interpleader: Manulife maintained its neutral stance as to the rightful beneficiaries but argued that interpleader is a remedy it is entitled to and which it availed in good faith, claiming costs of suit and attorney's fees as it was only compelled to file the interpleader due to the conflicting claims.

• Trustee Requirement: Whether the subject insurance policies required Sarte to designate a trustee for minor beneficiaries.
• Best Evidence Rule: Whether the CA correctly applied the Best Evidence Rule to the photocopies of the BDFs dated July 31, 2002.
• Effectivity of Change of Beneficiary: Whether Sarte effected a change of beneficiary designation by written notice in form satisfactory to the Company by mere submission of the BDFs dated July 31, 2002 to Manulife's servicing agent, Cepeda.

• Trustee Requirement: No. The subject policies do not require the insured to designate a trustee for minor beneficiaries; Manulife's internal rules on this matter are not part of the written insurance contract and are therefore not binding on the insured.
• Best Evidence Rule: No. The CA erred in excluding the photocopies of the July 31, 2002 BDFs; the petitioners duly proved the existence, execution, loss or non-production of the originals, and the absence of bad faith, satisfying the requisites for admitting secondary evidence under the Original Document Rule.
• Effectivity of Change of Beneficiary: Yes. Sarte substantially complied with the policy provision allowing change of beneficiary "by written notice in form satisfactory to the Company" by accomplishing and signing Manulife's own BDF forms and submitting them to its authorized servicing agent, whose receipt constituted notice to the insurer.

• Trustee Requirement: The insurance policy is the entire contract between the parties, as mandated by Section 227(c) of the Insurance Code and as expressly stipulated in the subject policies' "CONTRACT" provision, which states that the application, the policy, and attached written statements constitute the entire contract and that only the President or a Vice-President of the Company may change, modify, or waive its provisions in writing. Upon careful examination of the subject policies, nothing in their provisions requires the observance of Manulife's internal rules — neither the designation of a trustee for minor beneficiaries nor the processing and registration of BDFs in Manulife's records. Neither the Insurance Code nor any statute or implementing rules requires the same. The vinculum juris between Sarte and Manulife consists solely of the subject policies; since their terms do not mention Manulife's internal rules, there is no juridical tie binding Sarte to those rules. Moreover, the parol evidence rule under Section 10, Rule 130 of the Rules forbids the addition of terms to a written agreement by testimony of oral agreements, and the procedural conditions for admitting parol evidence — intrinsic ambiguity, mistake, failure to express true intent, validity challenge, or subsequent terms — were not present, as the terms of the subject policies were never put in issue in any pleading. Manulife's own Vice President, Broñosa, testified that the designation of a trustee was "advisable," not indispensable, and that failure to name a trustee does not invalidate the beneficiary designation as a general rule. Section 180 of the Insurance Code further provides that, in the absence of a judicial guardian, the father or mother of a minor beneficiary may exercise rights under the policy without court authority. Manulife's internal rules are thus merely for operational convenience and cannot be the parameter for judging the conflicting claims.

• Best Evidence Rule: The subject of inquiry is the contents of the July 31, 2002 BDFs, specifically the designation of Lara and Renzo as beneficiaries. Under the Original Document Rule (Section 3, Rule 130), secondary evidence is admissible when the original is lost or destroyed, or cannot be produced in court without bad faith on the part of the offeror. Before secondary evidence may be adduced, the offeror must prove: (1) the existence or due execution of the original; (2) the loss and destruction of the original or the reason for its non-production in court; and (3) the absence of bad faith on the part of the offeror. The existence of the July 31, 2002 BDFs was established by Gealogo's positive testimony that she saw Sarte signing them and that she prepared the originals for Sarte to sign. The execution was duly proven under Section 20 of Rule 132, as Gealogo was one who saw the document executed. The loss or reason for non-production was proved by petitioners' candid admission that Edita only received photocopies and never had possession of the originals; Gealogo testified that she gave the originals to Cepeda, who alleged she returned them to Sarte, but Cepeda passed away before she could adduce evidence on her behalf. The contents were proven by the photocopies and by Gealogo's testimony, she being the person who typed in the names of Lara and Renzo and saw Sarte signing them, pursuant to Section 5 of Rule 130. There was no evidence of bad faith on the part of petitioners. The RTC therefore correctly admitted the photocopies into evidence, and the CA erred in ruling otherwise.

• Effectivity of Change of Beneficiary: The policies provide that a beneficiary is designated "either in the policy or by a declaration in writing by the Owner" and that "during the life insured's lifetime the Owner can change the beneficiary designation from time to time by written notice in form satisfactory to the Company." The policies also require "due proof of the claimant's right to receive payment" upon settlement, indicating that claims are not settled solely on the basis of Manulife's records. The Court adopted the "substantial compliance" principle from American jurisprudence, under which a change of beneficiary is effective when the insured has done all in his power to comply with the policy's requirements, even if the insurer has not completed its internal processing. This view is more consistent with Philippine contract law: Article 1377 of the Civil Code provides that the interpretation of obscure words or stipulations shall not favor the party who caused the obscurity, and Article 1373 provides that if a stipulation admits of several meanings, it shall be understood as bearing that import most adequate to render it effectual. Since the policies do not define what constitutes "satisfactory form," the clause cannot be interpreted in a manner more burdensome to the insured. Sarte accomplished and signed Manulife's own BDF forms — the very pro forma documents the insurer provides for this purpose — and submitted them to Cepeda, who was Manulife's authorized agent. Under the doctrine of imputed knowledge, notice to the agent is deemed notice to the principal. Receipt by Cepeda was proven by Quinones' testimony, the Acknowledgment Receipt signed by Cepeda's secretary Lynn Gagan, and Cepeda's own admission in her Answer. Sarte had substantially complied with all that was required of him under the subject policies to designate Lara and Renzo as his beneficiaries, and such notice was sufficient to vest them with rights over the proceeds.

• Substantial Compliance Doctrine in Change of Beneficiary — When a life insurance policy reserves to the insured the right to change the beneficiary and specifies a procedure for doing so, the change is effective if the insured has done all that he reasonably could do to accomplish it, even if the insurer has not completed its internal processing or registration. Equity will regard the change as fully completed when the insured has pursued the course pointed out by the policy and has done all required of him to effect a change. The Court applied this doctrine to hold that Sarte's accomplishment, signing, and submission of Manulife's own BDF forms to its authorized agent constituted substantial compliance with the policy's "written notice in form satisfactory to the Company" requirement, notwithstanding that the BDFs were not registered in Manulife's records.

• Entire Contract Doctrine in Insurance — Under Section 227(c) of the Insurance Code, a life insurance policy shall contain a provision that the policy (and the application, if attached) constitutes the entire contract between the parties. Only the President or a Vice-President of the company may change, modify, or waive the policy's provisions in writing. The Court applied this doctrine to hold that Manulife's internal rules, which were not embodied in the subject policies, could not bind the insured and could not be used as the parameter for resolving the conflicting claims.

• Parol Evidence Rule — Under Section 10, Rule 130 of the Rules, when the terms of an agreement have been reduced to writing, it is considered as containing all the terms agreed upon, and no evidence of such terms other than the contents of the written agreement may be admitted, except under specified conditions (intrinsic ambiguity, mistake, failure to express true intent, validity challenge, or existence of subsequent terms). The Court held that the introduction of Manulife's internal rules was not a proper application of the parol evidence rule, as the terms of the subject policies were never put in issue in any pleading, and such rules could not be used to "modify, explain, or add" to the contract stipulations expressly stated in the policies.

• Doctrine of Imputed Knowledge — Notice to the agent is deemed notice to the principal. The Court applied this doctrine to hold that upon Cepeda's receipt of the July 31, 2002 BDFs, Manulife was deemed to have been notified of the beneficiary designations therein, as Cepeda was Manulife's authorized agent for receiving BDFs.

• Requisites for Secondary Evidence of Lost or Destroyed Documents — Before a party may adduce secondary evidence to prove the contents of an original document, the offeror must prove: (1) the existence or due execution of the original; (2) the loss and destruction of the original or the reason for its non-production in court; and (3) the absence of bad faith on the part of the offeror to which the unavailability of the original can be attributed. The Court found all three predicates satisfied in this case.

• "Since the terms of the policies do not mention anything about Manulife's internal rules, there is no juridical tie that binds Sarte to said internal rules. As such, the policies do not obligate the insured to designate trustees for minor beneficiaries. Neither was it legally necessary for the July 31, 2002 BDFs to be registered in Manulife's internal records so that Lara and Renzo may acquire a vested interest in the subject policies. Simply put, Manulife's internal rules are not a legal norm that has any relevance in the resolution of the issues of this case." — This passage articulates the ratio decidendi on the first issue: that the insurer's internal rules cannot bind the insured when they are not part of the written insurance contract.

• "Sarte had substantially complied with all that was required of him under the subject policies to designate Lara and Renzo as his beneficiaries. Since Cepeda had received the originals of the July 31, 2002 BDFs, Manulife is deemed to have been notified in writing of said beneficiary designations. Such notice was sufficient to vest Lara and Renzo with rights over the proceeds of the subject policy." — This passage states the Court's conclusion on the third issue, applying the substantial compliance doctrine to the facts of the case.

• "Subsequently, however, the strict compliance approach produced a counterreaction as courts, uncomfortable with a dogma requiring them at times to disregard the plain intention of the insured, evolved a 'substantial compliance' principle rendering effective any attempted change in which the insured had done all he reasonably could do to accomplish it." — This passage introduces the substantial compliance doctrine as adopted from American jurisprudence, which the Court found more in tune with Philippine doctrines on contract law.

• "The clear import of all of these provisions is that the insurer will not pay a claim after conducting a quick name-check in its own records." — This passage supports the Court's rejection of the lower courts' reliance on Manulife's registered records as the sole determinant of entitlement to policy proceeds.

• The Wellex Group, Inc. vs. U-Land Airlines, Co. Ltd., 750 Phil. 530 (2015) — Cited for the doctrine that the vinculum juris or juridical tie is the efficient cause that binds the parties to an obligation, and that this linkage is the result of their bilateral actions giving rise to the contract. Applied to hold that the vinculum juris between Sarte and Manulife consists solely of the subject policies, and since their terms do not mention Manulife's internal rules, those rules cannot bind the insured.

• Filipinas Life Assurance Company vs. Pedroso, 567 Phil. 514 (2008) — Cited for the principle that a principal (insurance company) is bound by an act of its insurance agent done within the scope of authority. Applied to establish that Cepeda, as Manulife's authorized agent, could receive BDFs on Manulife's behalf.

• Citibank, N.A. Mastercard vs. Teodoro, 458 Phil. 480 (2003) — Cited for the three predicates that must be proven before secondary evidence of a lost or destroyed original document may be admitted: (1) existence or due execution of the original; (2) loss and destruction or reason for non-production; and (3) absence of bad faith on the part of the offeror. Applied to hold that the photocopies of the July 31, 2002 BDFs were properly admitted.

• Bank of Commerce vs. Planters Development Bank, 695 Phil. 627 (2012) — Cited for the doctrine that interpleader allows a stakeholder to join all competing claimants in a single proceeding to determine conflicting claims without exposing the stakeholder to the risk of multiple payment. Applied to uphold the propriety of Manulife's interpleader filing and to deny the counterclaims against it.

• Bonilla vs. Barcena, 163 Phil. 516 (1976) — Cited for the rule that an action does not survive if the injury complained of is to the person, with property and rights of property being merely incidental. Applied to deny Cepeda's counterclaim, as her cause of action was specific to her person and did not survive her death.

• Philippine National Bank vs. Chan, 807 Phil. 195 (2017) — Cited for the doctrine on consignation under Article 1256 of the Civil Code, including the circumstances when consignation alone is sufficient without prior tender of payment, particularly when two or more persons claim the same right to collect. Applied in the context of Manulife's obligation to pay the proceeds upon notice of death.

• Nacar vs. Gallery Frames, 716 Phil. 267 (2013) — Cited for the rule that legal interest of 6% per annum begins to run from the time the claim is made judicially or extrajudicially, when demand is established with reasonable certainty. Applied to fix the start date of the 6% per annum legal interest on the policy proceeds at January 21, 2004, when Manulife received Edita's letter reiterating her children's claim.

• Bacolor vs. VL Makabali Memorial Hospital, Inc., 784 Phil. 822 (2016) — Cited for the guidelines on defective verification and certificate against non-forum shopping, including when strict compliance may be dispensed with in the interest of substantial justice. Applied to give due course to the petition despite a defective verification and certificate of non-forum shopping signed by counsel rather than the petitioners themselves.

• Section 227(c), Insurance Code (P.D. No. 612) — Provides that an individual life or endowment insurance policy shall contain a provision that the policy (and the application, if attached) constitutes the entire contract between the parties. Applied to hold that the subject policies, which contain an "entire contract" clause, embody the totality of the contractual relationship between Sarte and Manulife, and that Manulife's internal rules, not being part of the policy, cannot bind the insured.

• Section 180, Insurance Code (P.D. No. 612) — Provides that, in the absence of a judicial guardian, the father or mother of a minor who is an insured or beneficiary under a life, health, or accident insurance contract may exercise rights under the policy on behalf of the minor without court authority or bond, where the minor's interest does not exceed ₱20,000. Applied to demonstrate that the designation of a trustee is not legally indispensable, as the law itself provides alternative mechanisms for protecting minor beneficiaries' interests.

• Section 11, Insurance Code (P.D. No. 612) — Provides that the insured shall have the right to change the beneficiary designated in the policy, unless he has expressly waived this right. Applied to support the interpretation that the "satisfactory form" clause should be construed to give effect to the insured's right to change beneficiaries.

• Section 10, Rule 130, Rules of Court (Parol Evidence Rule) — Provides that when the terms of an agreement have been reduced to writing, it is considered as containing all the terms agreed upon, and no evidence of such terms other than the contents of the written agreement may be admitted. Applied to hold that Manulife's internal rules could not be used to modify, explain, or add to the terms of the subject policies.

• Section 3, Rule 130, Rules of Court (Original Document Rule) — Provides that when the subject of inquiry is the contents of a document, no evidence is admissible other than the original, except when the original is lost or destroyed, or cannot be produced in court without bad faith on the part of the offeror. Applied to determine the admissibility of the photocopies of the July 31, 2002 BDFs.

• Section 5, Rule 130, Rules of Court — Provides that when the original document has been lost or destroyed or cannot be produced in court, the offeror, upon proof of its execution or existence and the cause of its unavailability without bad faith, may prove its contents by a copy, by recital in an authentic document, or by testimony of witnesses. Applied to hold that the contents of the original July 31, 2002 BDFs were duly proven by the photocopies and by Gealogo's testimony.

• Section 20, Rule 132, Rules of Court — Provides that before a private document offered as authentic is received in evidence, its due execution must be proved by anyone who saw the document executed, by evidence of the genuineness of the signature of the maker, or by other evidence showing due execution and authenticity. Applied to hold that the execution of the July 31, 2002 BDFs was proven by Gealogo's testimony that she saw Sarte sign the originals.

• Article 1868, Civil Code — Defines the contract of agency: a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter. Applied to establish that Cepeda, as Manulife's authorized agent, could receive BDFs on the insurer's behalf.

• Article 1377, Civil Code — Provides that the interpretation of obscure words or stipulations in a contract shall not favor the party who caused the obscurity. Applied to hold that the undefined "satisfactory form" clause in the policies cannot be interpreted in a manner more burdensome to the insured, since Manulife drafted the contract.

• Article 1373, Civil Code — Provides that if some stipulation of any contract should admit of several meanings, it shall be understood as bearing that import which is most adequate to render it effectual. Applied to adopt the substantial compliance interpretation of the "satisfactory form" clause, as it best gives effect to the insured's right to change beneficiaries.

• Article 2209, Civil Code — Provides that if the obligation consists in the payment of a sum of money and the debtor incurs in delay, the indemnity for damages, absent stipulation, shall be the payment of legal interest at 6% per annum. Applied to impose 6% per annum legal interest on the policy proceeds from January 21, 2004 until fully paid.

• Article 1256, Civil Code — Provides that consignation alone is sufficient even without prior tender of payment when, among others, two or more persons claim the same right to collect. Applied in the context of Manulife's obligation to pay the proceeds upon notice of death, notwithstanding uncertainty as to the rightful beneficiary.

• Article 1169, Civil Code — Provides that those obliged to deliver or to do something incur in delay from the time the obligee judicially or extrajudicially demands fulfillment of the obligation. Applied to determine when Manulife incurred delay in its obligation to pay the policy proceeds.

• Section 85(e), National Internal Revenue Code — Provides that proceeds of life insurance may be included in the gross estate for purposes of computing estate tax, subject to certain exceptions. Cited to clarify that life insurance proceeds are not part of the estate of the insured, but may be included in the gross estate solely for estate tax computation purposes.

Peralta, C.J. (Chairperson), Caguioa, Zalameda, and Gaerlan, JJ., concurred. No separate concurring opinions were written.