Faith owes $50,000 to Investment Lenders Inc., a partnership of Cindy and Ryan.
ID: 371672 • Letter: F
Question
Faith owes $50,000 to Investment Lenders Inc., a partnership of Cindy and Ryan. She is also a partner with Tom in a business venture. What insurable interests exist in this situation?
Faith has an insurable interest in Cindy and Ryan's lives.
Investment Lenders Inc. has an insurable interest in Tom, but does not have an insurable interest in Faith.
Only Tom and Faith have insurable interests.
Tom and Faith have insurable interests in each others' lives and Investment Lenders Inc. has an insurable interest in Faith.
Faith has an insurable interest in Cindy and Ryan's lives.
Investment Lenders Inc. has an insurable interest in Tom, but does not have an insurable interest in Faith.
Only Tom and Faith have insurable interests.
Tom and Faith have insurable interests in each others' lives and Investment Lenders Inc. has an insurable interest in Faith.
Explanation / Answer
Tom and Faith have insurable interests in each others' lives and Investment Lenders Inc. has an insurable interest in Faith.
Investment Lenders Inc. needs to recover debts from Faith and hence the Inc. has a financial interest in Faith. Therefore it could be an insurable interest. Moreover, as Tom and Faith are partners in a business venture, one of them could suffer a financial loss if the other partner has turned incompetent or in case of death of a partner because in such a case, the partnership firm gets automatically dissolved. That is why, the Tom and Faith have insurable interests in each other’s lives because of the existence factor of the partnership firm relating to it.
Tom and Faith have insurable interests in each others' lives and Investment Lenders Inc. has an insurable interest in Faith.
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