Tiffany, who is married to Saul, takes out a $1,000,000 life insurance policy on Saul's life in 2008. Two years later they get divorced and Tiffany immediately remarries. Saul is not required to pay any alimony or child support to Tiffany after the divorce. In 2015, Saul dies. What will Tiffany collect on the life insurance policy, assuming she continued to pay all premiums due following their divorce?

Question

Quizplus · Accepted Answer

Tiffany will collect $1,000,000 because she had an insurable interest in Saul's life at the time the policy was purchased. Insurable interest needs to exist at the time the policy is initiated, not necessarily at the time of the claim or the insured's death.

Tiffany, Who Is Married to Saul, Takes Out a $1,000,000