Wednesday, June 1, 2011

What does insurable interest mean

What does insurable interest mean?

What is insurable interest? Most insurance companies require "insurable interest" before you can purchase a life insurance policy on someone's life. The most common insurable interest categories include kids, spouses, business partners, etc.

Today, there are some insurance companies who are more liberal with their definition of insurable interest. If you have a unique situation, be sure to ask your agent if a company will allow you to own a life insurance policy based on your request for insurable interest. Don't waste time getting a medical exam and completing an application only to find out the company won't allow your request for insurable interest.

Do your homework first. This is especially true if you are working with an insurance agent who is new to the business. The newer agents are doing everything that they can to generate new business. They might not be aware of a policy that might not be accepted once it is underwritten by the carrier. If your agent has less exerience, see if he or she can get clarification from the company regarding "who is eligible" for coverage.

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