A creditor has insurable interest in the life of the debtor beyond the extent of the debt.

Name: A creditor has insurable interest in the life of the debtor beyond the extent of the debt.
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Question

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A creditor's insurable interest in the life of the debtor is limited to the amount of the debt. The creditor cannot insure the debtor's life for more than the debt owed because the insurable interest is based on the financial loss the creditor would suffer upon the death of the debtor.

A Creditor Has Insurable Interest in the Life of the Debtor