State RegulationsAZ specificDifficulty 3/5
An acquaintance of a Scottsdale resident stands to gain if the resident dies soon, but has no lawful and substantial economic interest in the resident's continued life. Under A.R.S. 20-1104, may the acquaintance insure the resident's life?
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
A.R.S. 20-1104 requires a lawful and substantial economic interest in the continued life, health, or safety of the insured; an interest arising only from the insured's death does not qualify. The acquaintance lacks the required stake and cannot lawfully insure the Scottsdale resident's life.
Why the other options are wrong
- A) Consent does not create an insurable interest where none exists under A.R.S. 20-1104.
- B) The interest must be lawful, substantial, and economic in the continued life - a mere hope of gain from death fails that test.
- C) Producer licensure is irrelevant to whether an insurable interest exists.
Memory hook
Hoping for death is not an insurable interest.