Life Insurance FundamentalsQuestion 147 of 716
Which of the following is a category in which insurable interest in another person's life is generally recognized?
a.An investor who bought the policy on the secondary market with no prior relationship
b.A business that depends on a key employee
c.A neighbor who lives next door to the proposed insured
d.A stranger purchasing a policy on a famous athlete
Explanation
Recognized categories of insurable interest include self, spouse, close family, business partner, key employee, and creditor. A neighbor, a stranger, or a passive investor with no relationship has no insurable interest at policy issue.
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PrepPass team · Verified against California Life & Health Insurance License Exam · How we review
Reviewed by John Zihao Zhang — California-Licensed Life Insurance Agent (CA Dept. of Insurance License #4396095 — verify)