State RegulationsCO specificDifficulty 2/5
Under Colorado life insurance law, which of the following persons has an insurable interest in an applicant's life?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Colorado's insurable interest statutes, C.R.S. § 10-7-701 through 710, recognize insurable interest grounded in a genuine family relationship or a lawful financial stake in the insured's life — the test is whether the person would suffer a loss upon the insured's death.
Why the other options are wrong
- A) A stranger who expects no loss has no insurable interest, no matter who selected them.
- B) Willingness to pay the premiums does not create an insurable interest.
- C) Living in the same city does not create an insurable interest.
Memory hook
No loss, no insurable interest.