In life insurance policy assignments, which statement is true regarding insurable interest?

• A. The assignee must have an insurable interest.
• B. The assignee generally does not need insurable interest.
• C. An assignment is invalid without insurable interest.
• D. Insurable interest is required only for the first assignment.

Answer: (B)

Insurable interest is required when the policy is issued to prevent wagering on someone’s life, not for every subsequent ownership change. Once a policy is in force, ownership can be transferred by assignment, and the new owner does not generally need to have insurable interest in the insured. The insurer’s obligation and the validity of the policy aren’t dependent on the assignee’s insurable interest after issuance, as long as the assignment is properly executed. This is why the statement saying the assignee generally does not need insurable interest is the best choice.