Do Your Clients Have Insurable Interest?

Do Your Clients Have Insurable Interest?

State regulators and insurance companies are paying extra attention to the issue of insurable interest, and advisors better be careful in writing life insurance policies.

Worst case scenario: You sell your client a life insurance plan, but the insurer refuses to pay the death benefit claim. This is not out of the realm of possibility, as state regulators and insurance companies become more scrutinizing over “insurable interest.”

How close is close enough for your clients’ to be considered a beneficiary to a life insurance policy? Do they have to be married? A blood relative? It’s often an interesting dance trying to figure

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TAGS: Insurance
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