Question

question 7 of 15
which of the following statements is not true concerning insurable interest as it applies to life insurance?
a. an individual has an insurable interest in their own life.

b. a married person has an insurable interest in their spouse.

c. a debtor has an insurable interest in the life of a lender.

d. business partners have an insurable interest in each other.

Explanation:

Insurable interest in life insurance requires a financial or emotional loss if the insured person dies. An individual has insurable interest in their own life, spouses have it in each other, and business partners have it in one another due to potential financial harm from the other's death. A debtor does not face a loss if a lender dies; instead, the lender (or their estate) has an insurable interest in the debtor to recover owed funds.

Answer:

C. A debtor has an insurable interest in the life of a lender.