State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
For a life or health insurance policy issued in California, insurable interest must generally exist:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
California law, consistent with Section 10110 and the settled rule for life and health coverage, requires insurable interest to exist when the insurance is procured — at the time of application and issuance. It need not exist at the time of loss. The requirement is tested at inception to prevent wagering policies, but once the policy is in force, the interest may change or even cease without voiding coverage.
Why the other options are wrong
- B) The interest is tested at policy inception, not when a claim is filed.
- C) The moment of loss is not the measuring point; the interest must exist when the contract is made.
- D) The interest need not continue for the entire policy life; it may end after issuance without invalidating the policy.
Memory hook
Check the box at the birth of the policy, not at the death of the insured.