Practice question
At inception, a creditor validly insures the life of a debtor whose death could prevent payment. The debt is later fully paid before death. The insurer argues section 19 automatically defeats the policy solely because the original interest ceased. Assume no other legal or policy issue. Which is best?
- All life interest must remain at death
- The inception-only interest rule means later cessation alone does not defeat the interest requirement
- Only the beneficiary’s wealth matters
- Repayment retrospectively eliminates inception interest
- Property and life timing rules are identical
Legal references
- https://lawphil.net/statutes/repacts/ra2013/ra_10607_2013.html — Insurance Code as amended by RA 10607, sections 10 and 13–19
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