Feta is a partner in the game design firm GR8 Games,Inc. ,which ob?tains key-person life in?surance on Feta in the amount of $1 million from Halo Insurance Company.Feta quits GR8 Games to join Icy Applications,Inc.Feta dies.Under the principle of insurable interest,Halo must pay the $1 million to

Question

Quizplus · Accepted Answer

The principle of insurable interest means that the person who takes out an insurance policy must have a financial interest in the insured person's life. In this case, the insurance policy was taken out by GR8 Games, indicating that they had an insurable interest in Feta's life while he was still working for them. Since Feta has now quit and joined Icy Applications, his former employer no longer has an insurable interest in his life, and the insurance policy is no longer valid. Therefore, Halo Insurance Company does not have to pay anyone.

Feta Is a Partner in the Game Design Firm GR8