ch. 2 life ins. basics; insurable interest

insurable interest must--

exist at the time of application

the policy owner must--

have insurable interest in the life of the insured

Once an ins. policy has been issued, the insurer must;

pay the policy benefit, wether or not insurable interest exists

In life insurance, insurable interest must exist between who?

the policy owner and the insured at the time of application

To purchase insurance what must the policy holder face?

the possibility of losing money or something of value in the event of loss.

A valid insurable interest may exist between the Policyowner and the insured when the policy is insuring --

1. the policy owners life 2. the life of a family member ( a spouse or a close blood relative) 3. the life of a business partner, key employee, or someone who has a financial obligation to the policy owner (ex: debtor to a creditor)

Is insurable interest required of beneficiaries?

no, since the beneficiaries well being is dependent upon the insured, and the beneficiaries life is not the one being insured, the beneficiary does not have to show an insurable interest for the policy to be purchased