Question

When must an insurable interest exist for a life insurance claim?

A) at the policy inception and time of loss
B) at the policy inception only
C) at the time of loss
D) either at the policy inception or at the time of the loss

Answer 1

An insurable interest must exist at either the policy inception or the time of the loss for a life insurance claim.

Step-by-step explanation:

In the case of a life insurance claim, an insurable interest must exist at either the policy inception or the time of the loss. This means that the person making the claim must have a financial or emotional connection to the insured person.

For example, if someone takes out a life insurance policy on their own life, they have an insurable interest because they stand to suffer financially from their own death. However, if someone tries to take out a life insurance policy on the life of a stranger with whom they have no connection, they would not have an insurable interest.