Carl takes out insurance on his life and names a friend,Roy,who happens to be a homeless veteran,as beneficiary of his policy.Roy cannot collect the life insurance when Carl dies because Roy has no insurable interest on Carl's life.

A beneficiary does not need to have an insurable interest in the life of the insured in order to collect the death benefit on a life insurance policy. As long as the policy is valid and premiums are paid, the beneficiary has the right to collect the death benefit. However, it is important to note that naming a homeless individual or someone without the means to manage a large sum of money as beneficiary may not be in their best interest and could lead to financial mismanagement.