P&CNew Yorkeasy
Under NY Insurance Law § 3205, when must an insurable interest exist for a person who procures a life insurance contract on the life of another?
At the time the contract is made (inception)
BOnly at the time of the insured's death
CAt every premium-payment date
DAt inception and continuously through death
Why this is the answer
NY § 3205 governs insurable interest in life. A person procuring insurance on the life of another must have an insurable interest at the time the contract is made — defined to include close family relationships (spouse, blood / law relatives within agreed degrees) and substantial economic interest (e.g., key-person, business partner, creditor). Once validly issued, the policy remains enforceable even if the interest later lapses (e.g., divorce, retirement, paid-off loan), unlike property insurance under § 3401.
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