Dana loans her brother,Marcus,$500,000 with which to start a movie production company. The business assets are shown in the loan agreement as collateral for the loan. Dana can insure Marcus' life because:

Question

Quizplus · Accepted Answer

Insurable interest means that the person taking out the policy has a financial or other type of interest in the insured person continuing to live. As Dana loaned Marcus a large sum of money to start a business and has the business assets as collateral, she has a financial interest in him remaining alive to pay back the loan. Therefore, she can insure his life.

Dana Loans Her Brother,Marcus,$500,000 with Which to Start a Movie