State RegulationsNY specificDifficulty 1/5
Under New York law, an individual who is not a close blood or marriage relative of the proposed insured may demonstrate an insurable interest in that person's life only through:
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under N.Y. Ins. Law §3205, insurable interest may be founded on love and affection only for close relatives by blood or marriage; every other person must have a lawful and substantial economic interest in the continued life, health, and bodily safety of the proposed insured — an interest that is distinct from an interest arising only upon that person's death. Without such an interest the contract would be an unlawful wager on human life, and a DFS-licensed agent should decline to place it.
Why the other options are wrong
- A) An interest arising only upon death is precisely what §3205 excludes: the economic interest must attach to the person's continued life, health, and bodily safety, not to the death itself.
- C) Love and affection is the basis recognized under N.Y. Ins. Law §3205 for close blood or marriage relatives, not for unrelated persons.
- D) No home-office authorization can substitute for the statutory insurable-interest requirement of §3205.
Memory hook
Insurable interest: love for family, a live economic stake for everyone else — never just an interest in death.