Mike overhears his class mate Billy's plans to sail across the Atlantic Ocean by himself over the summer break.Even though he does not really know Billy,Mike rushes out and buys an insurance policy for $100,000 on Billy's life.Billy never makes it to the other side of the Ocean and his boat is found upside down 2,000 miles from the coasts of Ireland.Mike can collect the $100,000.

Question

Quizplus · Accepted Answer

Mike did not have an insurable interest in Billy's life, as he did not have any financial or familial relationship with him that would cause him to suffer a loss if Billy died. Therefore, the insurance policy would be considered invalid and Mike would not be able to collect the $100,000.

Mike Overhears His Class Mate Billy's Plans to Sail Across