According to common law, when should insurable interest be present in a life insurance contract?
A
At the time of taking policy
B
At the time of claim
C
Both A & B
D
None of the above
Correct Answer: At the time of taking policy
According to common law, At the time of taking policy insurable interest must be present in a life insurance contract. If there was no insurable interest requirement, some people would be tempted to purchase life insurance policies to collect the death benefit by killing the insured. A person is always considered to have an unlimited insurable interest in his own life and health.