Third-Party Ownership and Insurable Interest

When Must Insurable Interest Exist?

*Insurable interest must be present at the time of application only *It is assumed you have insurable interest when you purchase a policy on yourself

Must prove Insurable interest when...

-Only have to prove if the owner is different than the applicant (third-party ownership) -must have financial or emotional loss

Third Party Ownership

A situation where the owner of a life insurance policy is someone other than the insured *There are three parties to the contract -The insurer -The insured -The owner/applicant

Business Insurance Market

In Business insurance market, insurable interest exists: -amount business partners -between corporations and their officers and directors -between any type of business and its key employees

Personal Insurance Market

In the Personal insurance market insurable interest exists: -between spouses or domestic partners -between parents and children -among other close family members

Insurable Interest

Insurable interest means that the person applying for the policy must be at risk of suffering a significant loss if the insured dies. The loss can be... -EMOTIONAL, based on love and affection -ECONOMIC,based on financial dependency such as the insured's income ***Insurable interest exists between lenders (creditors) and the people that owe them money (debtors)***