• FreeAdvice has a new Terms of Service and Privacy Policy, effective May 25, 2018.
    By continuing to use this site, you are consenting to our Terms of Service and use of cookies.

Insurable Interest

Accident - Bankruptcy - Criminal Law / DUI - Business - Consumer - Employment - Family - Immigration - Real Estate - Tax - Traffic - Wills   Please click a topic or scroll down for more.

aryels

Junior Member
What is the name of your state? Indiana

how is "insurable interest" determined?
Is there a legal remedy if a person without insurable interest purchases life insurance policies for someone else's children without notifying the parents , or later transfers ownership of the policies to someone else without insurable interest?
 


somarco

Member
An insurable interest must exist at the time the policy is issued. (Exceptions made for group life insurance). If the carrier determines during the underwriting process an insurable interest exists, and all other conditions are acceptable, the policy is issued as applied for. Any later change in beneficiaries (without regard to insurable interest) can be effected by the owner of the policy.

Insurable interest only affects the named beneficiary. An insurable interest does not have to exist between the owner and the insured, or the premium payor and the insured.
 

Betty

Senior Member
A beneficiary must have an insurable interest in the life of the insured at the time the policy is approved (issued). An insurable interest means the bene must suffer a financial "hardship" at the death of the insured. Close family members named beneficiaries (ie spouse, children) are automatically considered to have an insurable interest in the life of the insured. A friend would not - however; once the policy is in force, the owner can change the bene(s) to whoever they want without worrying about an insurable interest. Also, a person cannot apply for a life ins. policy on another person's children without the parents' consent. A parent must also sign the application. This info is usually the practice. I worked for an ins. co. & underwrote life ins. applications.
 

Find the Right Lawyer for Your Legal Issue!

Fast, Free, and Confidential
data-ad-format="auto">
Top