State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Under California Insurance Code Section 10110, which of the following persons has an insurable interest in the life of another?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Section 10110 lists the recognized insurable interests: every person has an insurable interest in his or her own life, in the life of any person on whom he or she depends wholly or in part for education or support, in the life of any person under a legal obligation to him or her for the payment of money or respecting property or services, and in the life of any person on whose life an estate or interest vested in him or her depends. A dependent has a clear insurable interest in the breadwinner's life.
Why the other options are wrong
- B) A mere hope of another's death creates no insurable interest; such a policy would be a wagering contract and invalid.
- C) A creditor has an insurable interest only if there is a legal obligation of money, property, or services, not when no claim exists.
- D) Geographic proximity to the insured does not create an insurable interest under Section 10110.
Memory hook
Section 10110: self, dependents, debtors, and estate-linked lives. A neighbor with hopes and prayers does not qualify.