Who are those who have an insurable interest in the life of a person? The answer is usually obvious, but not always.
Here’s an answer.
Those who have an insurable interest in the life of another fall into three general classes:
The first category is one so closely related by blood or affinity that he or she wants the other to continue to live, irrespective of monetary considerations;
Next, creditors; and
Third is one having a reasonable expectation of pecuniary benefit or advantage from the continued life of another.
The above is discussed in various cases including the 1949, Texas Supreme Court opinion styled, Drane v. Jefferson Standard Life Ins. Co.; the 1979, Texas Supreme Court opinion styled Empire Life Ins. Co. v. Moody; and the 2001, United States 5th Circuit opinion styled, DeLeon v. Lloyd’s London Certain Underwriters.
The third category listed above has been explained this way:
Bluntly expressed, insurable interest under classification, is determined by monetary considerations, viewed from the standpoint of beneficiary. Would he regard himself as better off from the standpoint of money, would he enjoy more substantial economic returns should the insured continue to live; or wojld he have more, in the form of the proceeds of the policy, should she die?