State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
In life and health insurance, California law requires the policyowner to have an insurable interest in the insured:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
In life and health insurance, the insurable interest must exist at the time the contract is made (policy issuance). CIC §10110 grants every person an insurable interest in their own life and health and in persons they support or who owe them legal obligations. Unlike property insurance, where insurable interest must exist at the time of loss, life and health insurance look to the moment the contract is created. The interest need not continue after issuance, which is why a policy may remain valid even if the relationship later ends.
Why the other options are wrong
- B) Requiring interest at the time of loss is the rule for property insurance, not for life and health insurance.
- C) The interest must exist at inception; it is not required to continue for the entire policy lifetime.
- D) Claim time is irrelevant to the requirement; the controlling moment is when the policy is issued.
Memory hook
Property checks the heart at loss; life and health check it at birth (of the policy).