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.An investor who bought the policy on the secondary market with no prior relationship
b.A neighbor who lives next door to the proposed insured
c.A stranger purchasing a policy on a famous athlete
d.A business that depends on a key employee
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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Reviewed by John Zihao Zhang — California-Licensed Life Insurance Agent (CA Dept. of Insurance License #4396095 — verify)