Life Insurance FundamentalsQuestion 134 of 315
Marco buys a $500,000 life insurance policy on his spouse. They divorce three years later, and Marco continues paying premiums. When his ex-spouse dies four years after the divorce, can Marco still collect?
a.No — insurable interest must continue throughout the policy
b.Yes — in life insurance, insurable interest only needs to exist at the time the policy is issued
c.No — divorce automatically voids any life policy
d.Yes, but only half the face amount
Explanation
In life insurance, insurable interest must exist at policy issue but does not have to continue afterward. Since Marco and his spouse were married when the policy was issued, the policy remains valid even after divorce.
Law Reference: Cal. Ins. Code §10110Practice all 315 questions free — no signup required.
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