Insurable Interest Flashcards
What is the rule regarding insurable interest on life and health?
Every person has an insurable interest in the life and health:
(a) Of himself, of his spouse, and of his children
(b) Of any person on whom he depends wholly or in part for education or support, or in whom he has a pecuniary interest
(c) Of any person under a legal obligation to him for the payment of money, or respecting property or services, of which death or illness might delay or prevent the performance; and
(d) Of any person upon whose life any estate or interest vested in him depends.
Can the insured change the beneficiary he designated?
The insured shall have the right to change the beneficiary he designated in the policy, unless he has expressly waived this right in the said policy.
What is the rule if the beneficiary willfully brought the death of the insured?
The interest of a beneficiary in a life insurance policy shall be deemed forfeited when the beneficiary is the principal, accomplice, or accessory in willfully bringing about the death of the insured.
In such a case, the share forfeited shall pass on to the other beneficiaries, the proceeds shall be paid in accordance with the policy contract. If the policy contract is silent, the proceeds shall be paid to the estate of the insured.
What is the rule regarding the insurable interest with regards to property?
Every interest in property, whether real or personal, or any relation thereto, or liability in respect therof, of such nature that a contemplated peril might directly damnify the insured, is an insurable interest.
An insurable interest in property may consist in what?
(a) An existing interest
(b) An inchoate interest founded on an existing interest
(c) An expectancy, coupled with an existing interest in that out of which the expectancy arises
Can a mere contingent or expectancy be insurable?
A mere contingent or expectant interest in any thing, not founded on an actual right to the thing, nor upon any valid contract for it, is not insurable.
What is the rule with regards to the existence of an interest in relation to when the insurance takes effect?
An interest in property insured must exist when the insurance takes effect, and when the loss occurs, but need not exist in the mean time.
Interest in life the life or health of a person insured must exist when the insurance takes effect, but need not exist thereafter or when the loss occurs.
What is the general rule when there is a change of interest in a thing insured?
Generally, a change of interest in any part of a thing insured unaccompanied by a corresponding change of interest in the insurance, suspends the insurance to an equivalent extent, until the interest in the thing and the interest in the insurance are vested in the same person .
Exception to this rule are:
(a) A change of interest in a thing insured, after the occurrence of an injury which results in a loss, does not affect the right of the insured to indemnity for the loss.
(b) A change of interest in one or more of several distinct things, separately insured by one policy, does not avoid the insurance as to the others.
(c) A change of interest, by will or succession, on the death of the insured, does not avoid an insurance, and his interest in the insurance passes to the person taking his interest in the thing insured.
(d) A transfer of interest by one of several partners, joint owners, or owners in common, who are jointly insured to the others, does not avoid an insurance even though it has been agreed that the insurance shall cease upon the alienation of the thing insured.
The general rule also do not apply to life, accident, and health insurance.
