Life Insurance FundamentalsQuestion 147 of 315
Which of the following is a category in which insurable interest in another person's life is generally recognized?
a.A stranger purchasing a policy on a famous athlete
b.An investor who bought the policy on the secondary market with no prior relationship
c.A business that depends on a key employee
d.A neighbor who lives next door to the proposed insured
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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