Articles Posted in Life Insurance

Life insurance lawyers will tell you that the answer to the titled question is dependent on the wording of the insurance policy and the facts of the case.

This issue was discussed in the 1979, Fort Worth Court of Appeals opinion styled, Leach v. Eureka Life Insurance Company of America.

This case involved a credit life insurance policy.  The deceased in Tommy Leach and the executrix of the estate is Mary Leach, the Plaintiff here.

Here is a life insurance case that went to trial in 2023.  The case is styled, Mirna Guzman v. Allstate Assurance Company.  The case was tried in the Northern District of Texas, Amarillo Division.

Allstate filed a declaratory judgment action against Guzman to have the life insurance policy she had applied for, rescinded due to misrepresentations in the policy application.

This was a lawsuit originally filed by Guzman and Allstate had countered with the declaratory judgment action.

Can someone who is not related by blood have a pecuniary interest in the life of another as it relates to life insurance policy?  This answer is discussed in a 1942, Texas Supreme Court opinion styled, Drane v. Jefferson Standard Life Ins. Co.

Here is what the court discussed in that case.

Although not related by blood or marriage to Harry Ezell, Jr. not indebted to him in any way, his godmother Dorothy Drane named him as beneficiary in two life insurance policies.  Upon her death, the executor of her estate, her brother, asserted that Ezell had n insurable interest.  The facts showed Miss Drane had bought clothes for the boy for fifteen years, had paid for his medical care, had cared for him while his mother was ill, had taken him on vacation, and sadly was killed in a wreck as she drove to visit him his freshman year in college, “taking him a radio, a cop and an apple pie.”  The court concluded that Ezell did have an insurable interest  based on a reasonable expectation of pecuniary benefit and advantage from Miss Drane’s continued life .  “We think that when Dorothy Drane was killed ‘his temporal affairs, his just hopes and well grounded expectations of support, of patronage, and advantage in life’ were impaired ….  It is inconceivable, under the facts of this record, that he would ever have been tempted to destroy her life in order to collect the proceeds of the two policies in suit.

Who are those who have an insurable interest in the life of a person?  The answer is usually obvious, but not always.

Here’s an answer.

Those who have an insurable interest in the life of another fall into three general classes:

Life insurance lawyers know that a beneficiary of a life insurance policy must have an “insurable interest” in the life of the insured.

Those who have an insurable interest in the life of another fall into three general classes:

(1)  one so closely related by blood or affinity that he or she wants the other to continue to live, irrespective of monetary considerations;