Page 11 - Life Assurance

4- Secured creditors: such as mortgages
have insurable interest in the property on which
they have lent money.

Building contractors have an insurable
interest in property on which they have a
mechanic's lien. In each of the two cases loss of
the building would endanger the ability to collect
amounts due.

However, general creditors-ones without
specific liens on the property are not regarded
as having a sufficiently great property right to
give them an insurable interest.

In most states, however, a general contractor
who reduces a debit to a judgment then has an
insurable interest in the debtor's property. A
businessperson has an insurable interest in the
profits expected from the use of property and in the
expense incurred managing that property.

5- The person life: In life insurance, an
insurable interest is always presumed to exist
for persons who voluntarily insure their own
lives.

An individual may procure life insurance
and may make anyone the beneficiary
regardless of whether the beneficiary has an
insurable interest. Of course, there are practical
limits as to the amount of life insurance an
individual may obtain.

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