Is the Insurance Policy Signed Abroad Valid?

Here's a story from Clarissa de Guia Ramos:

"To every Filipino who signed their insurance applications and proposals abroad, this is an
actual story for you.
A client asked for my help. He wants to know the status of his insurance policy. He learned from
Pinoy Insurance Talk Facebook group that signing insurance applications and proposals abroad
is prohibited and any insurance policy born out of such is void. Also, that when an insurance
policy is void, his family may not be able to claim anything. He got anxious and thought:
1. What will happen if I die during the contestability period? We can never be sure nothing will
happen.
2. How about after the 2-year contestability period? Will my family be able to claim this time?
He confronted his agent about it. His agent only offered excuses. He contemplated of inquiring
about the matter himself, but his agent told him that he will fix it. Trusting his agent, he did not
inquire. However, his agent never did. He decided to do something because he did not want to
always be left wondering whether or not his family will be able to claim. He wanted to file a
report.
I helped him by drafting his complaint which contained all the relevant facts he narrated to me. I
told him all the evidence he needed to prepare to establish the facts we stated in the letter. The
good thing about the evidence preparation was that he was able to provide everything I asked
that we would possibly need. Finally, I teached him where to go to, who are the people he
needed to talk to and how to inquire.
He arrived yesterday from abroad and went to Sun Life BGC today to air his concern. Here are
the following things he learned:
1. Indeed, the insurance policy is VOID, not just voidable.
Void means that a contract is invalid and has no force or legal effect - it never existed in the first
place. Voidable means that a contract is valid and has force or legal effect BUT can later on be
declared as invalid.

Why is an insurance policy - the basis of which are insurance applications and proposals signed
abroad - void?
Under Article 1409 of the Civil Code, one of the void and inexistent contracts is where it is
expressly prohibited or declared void by law. Insurance agents and companies here in the
Philippines are prohibited from selling insurance abroad because the license issued to them is
good only within the Philippines. Thus, it follows that there cannot be an insurance policy born
out from solicitations made by insurance agents and companies abroad.
2. Even if the years pass by, the company will NOT PAY the benefits.
Under Article 1410 of the Civil Code, the action or defense for the declaration of the inexistence
of a contract does not prescribe. This means that the insurance company can claim that the
contract is void at anytime, if indeed it is void. There is no time limit for the company to raise
that. The contract being void, the company can refuse to pay the benefits under the premise that
they have no obligation. Do note that in void contracts, the parties cannot be compelled to fulfill
their obligations because the very source of those duties are inexistent.
Something to remember: The rules on contestability period only applies to valid and voidable
insurance policies.
The Sun Life people told the client that it was a good thing he reported and that he had two
options:
1. If he wanted to keep his policy, he can request for a letter of acceptance from Sun Life which
will be heard and decided by a Committee.
2. If he wants nothing to do with his policy anymore, he can request for a cancellation of the
policy and refund of all the premiums he paid.
That being said, I encourage everyone to come forward and do what the client did. Do not let
your family suffer in the future."