State RegulationsGA specificDifficulty 2/5
A life insurance policy is procured in Georgia on the life of a person in whom the named beneficiary has no insurable interest, and the benefits are not payable to the insured or the insured's representative. Under O.C.G.A. § 33-24-3(i), what is the result?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under O.C.G.A. § 33-24-3(i), insurance on another person is void unless the benefits are payable to the insured, the insured's representative, or a person with an insurable interest in the insured; when the contract is void for this reason, the premiums are repaid — but without interest. The statute neutralizes wagering on strangers' lives while restoring the applicant's money without rewarding the transaction.
Why the other options are wrong
- B) The contract does not survive with a reduced benefit; § 33-24-3(i) makes it void outright.
- C) Premiums are repaid without interest; adding interest misstates the statutory remedy.
- D) The contract is void by statute; no Commissioner order is needed to terminate it.
Memory hook
No insurable interest, no contract — premiums back, interest never.