Question

*Please explain why*

Which of the following people have an insurable interest in Mike’s life?

A. Angel, Mike’s 25-year old daughter

B. James, Mike’s 30-year old son

C. Cassie, Mike’s ex-wife and angel’s mother

D. John, Mike’s employer

E. Donna, Mike’s daughter in law

F. Scott, Mike’s business partner

G. Rite, Mike’s fiancée

Answer 1

The below have a legitimate insurable interest in Mike's life

A. Angel, Mike’s 25-year old daughter: Because she is his daughter and is financially supported by him and also a blood relative

B. James, Mike’s 30-year old son: A blood relative and is son is a direct beneficiary

C. Cassie, Mike’s ex-wife and angel’s mother: Cassie is a dependent of Mike and will have to get alimony payments from him since she was his ex-wife. Since, he is no more, she needs financial support for survival and has insurable interest

There is no insurable interest for the employer since the business may only suffer a temporary loss and will be able to engage someone else. Donna. Mike's daughter-in-law will not have an insurable interest because his Son already has. Business partners have no stake in a life insurance and hence Scott ought to have taken another policy to protect business interest in case of Mike's death. Rite will not have insurable interest since she is not legally married to Mike.