An insurance contract is NOT considered to be an illegal form of "wagering" because
A)one must have an insurable interest in the person being insured.
B)insurance contracts are underwritten by reputable companies.
C)insurance activities are regulated by the state department of insurance.
D)the money being paid out comes from premiums collected over time.

Question

Quizplus · Accepted Answer

An insurance contract is not considered to be an illegal form of "wagering" because the insured must have an insurable interest in the person being insured. This means that the person must have a financial or other type of interest in the well-being of the insured, such as a parent-child relationship or a business partnership. Without an insurable interest, the contract would be considered a form of gambling or wagering, which is illegal in most states. The other choices may also contribute to why insurance is not considered a form of gambling, but they are not the primary reason.

An Insurance Contract Is NOT Considered to Be an Illegal