Question

In: Operations Management

Ali, a small businessman, goes to BofA for a loan and they grant it, but one...

Ali, a small businessman, goes to BofA for a loan and they grant it, but one of the terms requires him to buy a life insurance policy for the amount of the loan with BofA as the beneficiary. BofA is a:

creditor beneficiary
donee beneficiary
assignor
delegator

Solutions

Expert Solution

donee beneficiary

Bank of America is the donee beneficiary from the insurance. If the person is unable to repay the loan the insurance company will repay it on its behalf. This is a case where the third party is benefited from the contract.

keosha answered 2 years ago
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