E and f are business partners. each takes out a $500,000 life insurance policy on the other, naming himself as primary beneficiary. e and f eventually terminate their business, and four months later e dies. although e was married with three children at the time of death, the primary beneficiary is still f. however, an insurable interest no longer exists. where will the proceeds from e's life insurance policy be directed to?
Business · High School · Thu Feb 04 2021
Answered on
In many jurisdictions, the requirement for an insurable interest exists only at the inception of the policy, not at the time of the claim. Therefore, even though E and F terminated their business relationship, the primary beneficiary designation made by E on the life insurance policy would typically still stand. Consequently, as long as the policy was active and the premiums were being paid at the time of E's death, F would still receive the proceeds from the life insurance policy, regardless of whether an insurable interest exists at the time of E’s death.
So, in the scenario described, if all conditions of the policy were met, the proceeds from E’s life insurance policy would be directed to F, the primary beneficiary listed on the policy.