Quiz 29: Insurance, Wills, and Trusts
It is well settled that the test for testamentary capacity requires at a minimum that the testator comprehend and be able to recall and identify the natural objects of his or her bounty. The testator must also comprehend the type, character and description in general terms of the property being distributed. Further, the testator must understand and articulate a plan for disposing of the property. In the instant case the testator met these requirements.
The meaning of an insurable interest is that the holder of a policy should bear the entire financial loss when the event takes place. Insurable interest should take place when the insurance is purchased.it even exist when the loss is occurred. The insurance transactions are made possible by the insurable interest. Direct relationship, ownership and possession help in establishing insurable interest. When any person who is insured gets any kind of financial benefits from the existence of object that is insured, then insurable interest exists.
Insurance: Insurance is a type of contract and is generally governed by contract laws. Herein, the insurance company promises to pay a specific amount of money to another at happening of an event for which insurance is made. It is an arrangement in which allocation or transfer of risk is done. An applicant can insure anything he wants if it has some Insurance Interest in that thing. Insurance interest is there for personal property when applicant can derive monetary benefits from the existence of the property and would have to bear loss from its destruction. For Life insurance , insurance interest is there when a person has an expectation of benefit from another life. In case of property , Insurance interest must be present at the time of loss of the property, its existence at the time of purchasing policy is not compulsory. In case of life insurance , Insurance interest must be present at the time of purchasing the policy.