Short answer

No Philippine law requires a buyer to pay “extra-judicial settlement insurance.” That product is a private, optional surety or title-risk cover sometimes offered to manage risks that arise when heirs sell property after an extrajudicial settlement of estate (EJS) under Rule 74 of the Rules of Court. Who pays for it is a commercial term you can negotiate. What the law requires is different: proper settlement of the estate, payment of estate tax, compliance with publication rules, and submission of documentary requirements to the Register of Deeds (ROD) and the BIR.

Below is the complete legal landscape so you can choose the safest route for your transaction.

The legal framework you’re dealing with

1) Property regime when a spouse dies

If the property was acquired during marriage, first liquidate the marital property regime (usually absolute community of property under the Family Code for marriages from 3 Aug 1988 onward; earlier marriages may be conjugal partnership of gains, or a different regime by marriage settlements).
The surviving spouse retains his/her share from the community/conjugal property; only the decedent’s share goes to the estate, to be transmitted to the heirs (compulsory heirs include the surviving spouse and descendants/ascendants per the Civil Code).

2) How an EJS works (Rule 74, Rules of Court)

When allowed: No will, no outstanding debts (or debts have been paid/assumed), and heirs are of legal age (or represented).
Instruments:
- Deed of Extrajudicial Settlement of Estate (DOES) or Deed of Partition (if multiple heirs), or
- Affidavit of Self-Adjudication (if there is only one heir). These must be in a public instrument (notarized).
Publication: The EJS (or a notice of it) must be published once a week for three consecutive weeks in a newspaper of general circulation.
Two-year lien: For two (2) years from the EJS, persons unduly omitted (e.g., unknown heirs, unpaid creditors) may assert claims against the heirs/estate. This is not a bar to registration but is a risk to any buyer taking within the 2-year window.
Bond under Rule 74: The Rule also contemplates a bond (often called an “EJS bond” or “heirs’ bond”) especially in respect of personal property included in the settlement. Practice varies by ROD: some RODs annotate the two-year lien; some may ask for a surety bond before acting in certain scenarios. This bond protects third parties but is not a buyer-specific insurance requirement under statute.

3) Tax clearance is mandatory, not insurance

Estate Tax must be paid and an Electronic Certificate Authorizing Registration (eCAR) issued by the BIR covering the decedent’s share before the ROD will transfer the title to heirs or buyers. (An amnesty/penalty relief regime has existed in recent years, but whatever program applies, you still need the BIR’s eCAR.)
Documentary Stamp Tax (DST) and transfer taxes (local transfer tax, ROD fees) must also be settled during transfers (estate to heirs; heirs to buyer).

Where “EJS insurance” comes from (and what it is not)

In the market, “EJS insurance,” “heirs’ bond,” “Rule 74 bond,” or “title risk cover” are private surety or insurance products that:

Do not appear in nor substitute for the statutory requirements above; and
Are meant to cover the residual risk that an omitted heir/creditor or a procedural defect (e.g., publication flaws) surfaces within two years from the EJS (or, more broadly, any challenge to the heirs’ authority).

Key point: Because these are private risk-transfer tools, they are optional unless:

the ROD or a mortgagee bank imposes a bond/cover as a processing or credit condition, or
the parties contractually agree to obtain it.

Who pays? Negotiable. By default, the heirs/seller should deliver clear, registrable title; if they cannot eliminate the Rule 74 risk (e.g., they won’t wait two years or do judicial settlement), it is commercially reasonable to ask them to shoulder any bond/insurance or reduce price.

When is a bond/insurance practically useful?

Sale within the 2-year Rule 74 window. Highest risk of later claims by omitted heirs/creditors. A bond or title-risk cover can be a bridge if you can’t wait for the window to lapse.
Complex heirship (illegitimate children, predeceased heirs/representation, adoption, foreign divorce recognition issues).
Publication defects or uncertainty whether the EJS was properly published.
Debts exist(ed) but documentation is scarce (even if “assumed” in the EJS).
Bank financing. Many lenders are conservative and may require a bond or even a judicial settlement instead of EJS.

What is required vs optional (at a glance)

Required by law or agency practice (non-exhaustive):

Proper liquidation of the marital property regime.
EJS instrument (public instrument) and publication (3 consecutive weeks).
BIR: filing of estate tax return, payment of estate tax, issuance of eCAR.
ROD: submission of EJS, supporting civil registry documents, tax clearances, and payment of registration/transfer fees; annotation of any Rule 74 lien as applicable.

Not required by law (but may be imposed by counterparties):

“EJS insurance,” “heirs’ bond,” or title insurance. These are optional/contractual risk-management tools. Payment is a matter of negotiation.

Practical checklist for a buyer (spouse deceased scenario)

Title & property status
- Certified True Copy of Title (CTC) and lot plan/tax map.
- Verify owners of record (e.g., “Spouses A and B,” or just one spouse) and any annotations.
Heirship and marital regime
- Death certificate of the deceased spouse; marriage certificate; birth certificates of children/heirs.
- Identify the property regime (Family Code default or by marriage settlement) to know the decedent’s share.
Settlement route
- EJS (if criteria met) or judicial settlement/intestate proceedings when there are disputes, minor heirs without representation, or outstanding debts that can’t be regularized.
- If EJS, confirm:
  - Proper publication (collect the full newspaper issues or publisher’s certification and proof of dates).
  - Correct and complete list of heirs (watch for illegitimate children, predeceased heirs with representation, adopted children).
  - If a self-adjudication, verify there is only one heir in law.
Taxes & eCAR
- Estate tax paid and eCAR obtained for the decedent-to-heirs transfer.
- For the subsequent heirs-to-buyer sale, pay DST, local transfer tax, and ROD fees.
Two-year Rule 74 risk management
- Option A (lowest risk): Wait until 2 years from the last publication date have fully lapsed before buying.
- Option B: Proceed earlier but require the seller/heirs to:
  - Provide a surety bond/title-risk cover (if you want it);
  - Sign warranties and indemnities against omitted-heir/creditor claims; and
  - Escrow part of the price for 2 years (or a shorter negotiated period).
- Option C: Ask the seller to pursue a judicial settlement (heavier lift, greater certainty).
ROD practice
- Requirements can vary by registry. Some may accept the EJS and annotate the lien; others might ask for additional documentation (e.g., bond) in particular cases. Build this into your conditions precedent to closing.
Contract drafting tips
- Make clear title and successful transfer/issuance of new title to buyer a condition precedent.
- Allocate responsibility for estate taxes, publication, bond/insurance (if any), and assistance in curing defects.
- Include survival of warranties, indemnity, and a escrow/holdback tied to the 2-year period.

Frequently asked buyer questions

Is the buyer legally obliged to pay for the EJS bond/insurance? No. There is no statute that forces a buyer to pay for it. It’s optional and negotiable.

Can I register the sale even if it’s within the 2-year window? Usually yes, if documentary requirements are complete; the ROD may annotate the Rule 74 lien. But you still carry the residual risk of later claims.

What if one heir refuses to sign? An EJS requires participation of all heirs or their authorized representatives. Without unanimity (or proper representation/waiver), you typically need a judicial proceeding.

What protects me more—EJS insurance or waiting 2 years? Waiting eliminates the specific Rule 74 two-year risk. Insurance/bonds merely transfer that risk (subject to policy terms, exclusions, and limits).

Do I still need title insurance if I already have an EJS bond? They address different risks. An EJS bond often targets heir/estate claims; title insurance (if available) addresses wider title defects. Both are optional.

Bottom line

The legal must-haves are: proper estate and marital-regime liquidation, EJS (or court settlement), publication, BIR eCAR and taxes, and ROD registration.
“EJS insurance” is not legally mandated. It’s a commercial risk tool that you can require the seller/heirs to provide—or you can decline, wait out the 2-year period, or insist on a judicial settlement.
Structure your contract and closing so that the seller bears the burden of delivering clean, registrable title, with indemnities/escrow to protect you if you proceed before the two-year window lapses.

This is general information on Philippine law and practice. For a live deal, have a Philippine real-estate/estate-settlement lawyer review your documents, the publication proofs, and your draft Deed of Sale before you pay or transfer possession.