State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Under California Insurance Code Section 10110, when must the policyowner have an insurable interest in the life of the insured for a life insurance policy to be valid?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
CIC Section 10110 establishes who has an insurable interest in another's life, and California life insurance law requires that insurable interest exist when the policy is applied for and issued. Unlike property insurance, which generally requires an insurable interest both at inception and at the time of loss, life insurance only requires the interest at inception - it does not need to continue until death. This is a classic California-specific point anchored to LIFE-II.A.7.
Why the other options are wrong
- B) Life insurance does not require the insurable interest to continue after inception; the policy remains valid even if the relationship later changes.
- C) The interest must exist at inception, not only at death; requiring it only at death would permit wagering contracts.
- D) The claim-submission date is irrelevant; the validity of the contract is determined at the time it is formed.
Memory hook
Life: interest at inception is enough. Property: interest at loss too. Check the clock before you bet.