Question

Faith owes $50,000 to Investment Lenders, Inc., a partnership of Cindy and Ryan. She is also a partner with Tom in a business venture. What insurable interests exist in this situation?

a. Faith has an insurable interest in the lives of Cindy and Ryan.
b. Investment Lenders, Inc. has an insurable interest in Tom, but does not have an insurable interest in Faith.
c. Only Tom and Faith have insurable interests.
d. Tom and Faith have insurable interests in each other's lives and Investment Lenders, Inc. has an insurable interest in Faith.

Answer 1

Faith has an insurable interest in Cindy and Ryan, and Tom and Faith have insurable interests in each other's lives, while Investment Lenders, Inc. has an insurable interest in Faith.

Step-by-step explanation:

In this situation, the insurable interests can be identified as follows:

a. Faith has an insurable interest in the lives of Cindy and Ryan.

d. Tom and Faith have insurable interests in each other's lives and Investment Lenders, Inc. has an insurable interest in Faith.

Insurable interest refers to the legal interest a person has in something that is subject to insurance. In this case, Faith owes a significant amount of money to Investment Lenders, Inc., so she has an insurable interest in their lives since their passing could impact her financially. Additionally, as partners in a business venture, Tom and Faith have insurable interests in each other's lives. Lastly, Investment Lenders, Inc. has an insurable interest in Faith as she owes them a substantial debt.