40-450. Life insurance; insurable interests; assignments to charitable, benevolent, educational and religious institutions.
40-450
40-450. Life insurance; insurable interests; assignments to charitable,benevolent, educational and religious institutions.(a) A person of competent legal capacity may insure suchperson's own life and, either at the time the contract of insurance is enteredinto or thereafter, name any person as the beneficiary thereof irrespective ofwhether the person named has an insurable interest in the life of the insured. However, except as provided in this section, no person shall procure or causeto be procured any insurance policy upon the life of another person unless thebenefits under such policy are payable to the personal representative of theperson insured, or to a person having, at the time such contract of insurancewas entered into, an insurable interest in the person insured.
(b) A charitable, benevolent, educational and religious institutionqualifiedunder section 501(c) of the internal revenue codeshall be deemed to have an insurable interest in the life of an individualinsured who has executed a written consent to the assignment of the insurancecontract to such institution if such institutional assignee is named as theirrevocable beneficiary thereof.
(c) If the beneficiary, assignee or other payee under any contract made inviolation of this section receives from the insurer any benefits thereunderaccruing upon the death of the person insured, the personal representative ofthe insured may maintain an action to recover such benefits from the person soreceiving the benefits.
(d) Life insurance contracts may be entered into in which the person payingthe consideration has no insurable interest in the life of the person insuredif a charitable, benevolent, educational or religious institution qualifiedunder section 501(c) of the internal revenue code isirrevocably designated as the beneficiary. In making such contracts the personpaying the premium shall make and sign the application therefor as owner.The application must also be signed by the person whose life is to be insured. Such a contract shall be valid and binding among the parties theretonotwithstanding the absence otherwise of an insurable interest in the life ofthe person insured.
(e) The provisions of this section shall apply to all insurance contracts inforce on and after the effective date of this act and to the procurement,assignment and designation of beneficiaries thereof whenever made.
History: L. 1991, ch. 123, § 1; April 25.