Question

In: Finance

Define “Insurable Interest”, identify why there is a requirement for “Insurable Interest” in an insurance policy,...

  1. Define “Insurable Interest”, identify why there is a requirement for “Insurable Interest” in an insurance policy, and describe what an “Insurable Interest” is in Property & Casualty insurance and Life Insurance, and highlight the differences between the two.

Solutions

Expert Solution

Insurable interest is the desire of the party to take the insurance and is willing to pay the premium to insure the object or life. An the need for insurable interest is of utmost importance in an insurance policy since quite a few people do not have any interest in the policy and their application is rejected.

Insurable insurance in property and casualty insurance is the property itself and it must exist when the property is purchased and also when there is a loss. An life insurance includes insurable interest on the life of the policy holder and can include his family. The major difference between the two is that property insurance is more related with covering the loss of the house property and life insurance is on the life of a person.

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

Why do insurance companies need to identify both conditions and exclusions in an insurance policy? Why...
Why do insurance companies need to identify both conditions and exclusions in an insurance policy? Why should businesspeople purchasing insurance make sure they clearly understand the conditions and exclusions?
Why do insurance companies need to identify both conditions and exclusions in an insurance policy? Why...
Why do insurance companies need to identify both conditions and exclusions in an insurance policy? Why should business people purchasing insurance make sure they clearly understand the conditions and exclusions?
When must an insurable interest exist in life insurance? both at the time of death and...
When must an insurable interest exist in life insurance? both at the time of death and at the inception of the policy only at the inception of the policy only at the time the beneficiary is paid only at the time of death
Part I. Choose true or false? Explain why? 1. In non-life insurance, insurable interest must exist...
Part I. Choose true or false? Explain why? 1. In non-life insurance, insurable interest must exist when risks occur. True or False? Explain and give an example? 2. Third party liability insurance belongs to non-life insurance. True or False? Explain and give an example? 3. Subrogation will be applying if insured losses are caused by the third party? True or False? Explain and give an example? 4. Principle of ulmost good faith only applies to the insured. True or False?...
Insurable Interest Patrick contracts with an Ajax Insurance Company, an agent for a $50,000 ordinary life...
Insurable Interest Patrick contracts with an Ajax Insurance Company, an agent for a $50,000 ordinary life insurance policy. The application form is filled in to show Patrick’s age as thirty-two. In addition, the application form asks whether Patrick has ever had any heart ailments or problems. Patrick answers no, forgetting that as a young child he was diagnosed as having a slight heart murmur. A policy is issued. Four years later, Patrick becomes seriously ill and dies. A review of...
What is a key requirement for applying for a life insurance policy loan?
What is a key requirement for applying for a life insurance policy loan?
Fund Life & Health insurance How does the law of insurable interest protect human life? (identifying...
Fund Life & Health insurance How does the law of insurable interest protect human life? (identifying the requirement of the law and insurance company and analyzing how it protects general public.) What factors make joint life an effective tool in the case of a buy-sell agreement? ( Explain how JL matches the need for buy-sell agreement timing and analyzing what riders in JL benefits in the situation of buy-sell agreement.)
*Please explain why* Which of the following people have an insurable interest in Mike’s life? A....
*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
Define insurance and discuss the principle of indemnity. In an auto insurance policy, explain the meaning...
Define insurance and discuss the principle of indemnity. In an auto insurance policy, explain the meaning of the numbers 100/300/75. Explain what a living will is and how it differs from a health care proxy.
Explain why hedging is like buying an insurance policy. To buy an insurance policy, you need...
Explain why hedging is like buying an insurance policy. To buy an insurance policy, you need to pay a premium; what is the corresponding premium in hedging? Give an example to clarify your answer.
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT