L&HPennsylvaniamedium
Under 40 P.S. § 512, which of the following BEST describes Pennsylvania's insurable interest rule for life insurance on another person at policy inception?
AInsurable interest is never required if the insured consents in writing
BInsurable interest must exist only at the time of the insured's death, not at policy issuance
The applicant must have an insurable interest in the insured's life at policy issuance
DInsurable interest is required only for term life, not whole life
Why this is the answer
PA law requires that the applicant for life insurance on another have an insurable interest in the insured's life at the time the policy is issued. Insurable interest may arise from blood/marriage or a substantial pecuniary interest. Stranger-originated life insurance (STOLI) is prohibited.
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