General principles of security sought by lenders

LRB – APR 2023 – L2 – Q4 – Insurable Interest and Life Policy Assignment

Explain insurable interest in life insurance with examples, how a bank takes effective assignment over a life policy for a loan, and whether the policy remains valid if the insured resigns from the company.

Question

a. Using examples, explain the concept of insurable interest in Life Insurance. (5 Marks)

b. Sugarcandy Company Ltd has taken a 20-year Life Endowment Policy on the life of John Gawaka, its Chief Operating Officer, who is very vital in the operations of the company. The company presents the policy to Gloryland Bank Plc for a loan.

i. How will the bank take an effective assignment over the Life Policy? (10 Marks)

ii. If John Gawaka resigns from Sugarcandy Company Ltd, will the policy still be valid? Explain your answer. (5 Marks)

[Total = 20 Marks]

Answer

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Tags: Assignment of Policy, Examples, Insurable Interest, Life Insurance, Security for Loans, Validity on Resignation
Level: Level 2

Topic: General principles of security sought by lenders
Series: APR 2023

Topic: General principles of security sought by lenders

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LRB – APR 2023 – L2 – Q4 – Insurable Interest and Life Policy Assignment

Explain insurable interest in life insurance with examples, how a bank takes effective assignment over a life policy for a loan, and whether the policy remains valid if the insured resigns from the company.

LRB – APR 2023 – L2 – Q4 – Insurable Interest and Life Policy Assignment

Explain insurable interest in life insurance with examples, how a bank takes effective assignment over a life policy for a loan, and whether the policy remains valid if the insured resigns from the company.

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Topic: General principles of security sought by lenders

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LRB – APR 2023 – L2 – Q4 – Insurable Interest and Life Policy Assignment

Explain insurable interest in life insurance with examples, how a bank takes effective assignment over a life policy for a loan, and whether the policy remains valid if the insured resigns from the company.

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LRB – APR 2023 – L2 – Q4 – Insurable Interest and Life Policy Assignment

Explain insurable interest in life insurance with examples, how a bank takes effective assignment over a life policy for a loan, and whether the policy remains valid if the insured resigns from the company.

You're reporting an error for "LRB – APR 2023 – L2 – Q4 – Insurable Interest and Life Policy Assignment"

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