Asked by Hloni Nkolanyane on Jul 06, 2024
Verified
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.
Insurable Interest
The financial interest that a policyholder has in the person or property that is insured.
Life Insurance
An insurance contract that provides monetary compensation for losses suffered by another’s death.
Beneficiary
A third party receiving benefits from a contract made between two other parties. Also, the person named in an insurance policy to receive benefits paid by the insurer in event of a claim.
- Identify legal and insurable interests in the context of life insurance beneficiaries.
Verified Answer
Learning Objectives
- Identify legal and insurable interests in the context of life insurance beneficiaries.
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