Under the common-law doctrine of insurable interest as applied to life insurance (and codified in most state insurance codes), insurable interest in the life of the proposed insured must exist:

Why this is the answer

The insurable-interest doctrine bars wagering contracts on human life (Grigsby v. Russell, 222 U.S. 149 (1911)). In life insurance, the interest must exist when the policy is procured but need not continue — a policy one spouse owns on the other stays enforceable after a divorce, and a creditor's policy on a debtor remains enforceable after the debt is repaid. By contrast, property insurance requires insurable interest at the time of loss because the policy is one of indemnity. Categories of insurable interest in life include: (a) the insured himself (unlimited); (b) family relationships (spouse, parent/minor child) by presumption; (c) business relationships (key person, partner, creditor) by demonstrated economic dependency; (d) certain trusts and ERISA plans.