Question

In: Economics

Franken, a college student, recognized that she was financially dependent upon her widowed mother's financial support...

Franken, a college student, recognized that she was financially dependent upon her widowed mother's financial support while in college. To protect against this financial risk and loss, Franken persuaded her mother to take out an insurance policy naming her as the beneficiary.

  • How would you described this relationship and very specially how do you describe Franken's interest?
  • How would you describe the college's interest?
  • Be thorough and describe what rights these parties have in the insurance contract and who can, or can't sue to enforce the contract, the death benefit, should the mother die?

Solutions

Expert Solution

Franken is right now just a student..he can do odd jobs right now but to get a proper job with a good pay check and stability,he needs educational degrees. So that will take time till the time he does not complete his education. On the other hand his mother is widowed,so he does not have any other support in case of any unforseen circumstances. In order to guard himself against such unforseen circumstances,he wanted his mother to take out an insurance with him as the beneficiary,so that his education will not be disrupted.

College's interest in that they will not leave se a student and get the fees on time even if he's faced with any kind of unexpected events in life.

Definitely the son, Franken will benefit because he is the beneficiary of the insurance policy,and only he can sue the insurance company if he does not get his benefits on time after his mother's death. But other than him,not even the college can sue the insurance company in case of any problem regarding the payment of policy money after the mother's death.


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