State RegulationsGA specificDifficulty 2/5
A business partner buys life insurance on his co-owner in Georgia, and the policy remains in force. The partnership later dissolves and their financial relationship ends. Years later the insured dies and the former partner is still the named beneficiary. Under O.C.G.A. § 33-24-3(h), the insurable interest requirement is judged:
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under O.C.G.A. § 33-24-3(h), insurable interest must exist when the contract becomes effective — not at the time of loss. Because the partnership interest existed at inception, the policy remains valid even though the business relationship ended long before the insured's death; the requirement is judged once, when the coverage took effect.
Why the other options are wrong
- A) The requirement is not retested when the claim is filed; inception controls.
- B) The interest need not continue throughout the policy's life — only at the time the contract became effective.
- D) The beneficiary's demand for payment has no bearing on when insurable interest is judged.
Memory hook
Interest at inception, not at death.