§ 46A-1-113 — Insurable interest of trustee

A. In this section, "settlor" means a person that executes a trust instrument. "Settlor" includes a person for which a fiduciary or agent is acting. B. A trustee of a trust has an insurable interest in the life of an individual insured under a life insurance policy that is owned by the trustee of the trust acting in a fiduciary capacity or that designates the trust itself as the owner if, on the date the policy is issued: (1) the insured is: (a) a settlor of the trust; or (b) an individual in whom a settlor of the trust has, or would have had if living at the time the policy was issued, an insurable interest; and (2) the life insurance proceeds are primarily for the benefit of one or more trust beneficiaries that have: (a) an insurable interest in the life of the insured; or (b) a substantial interest engendered by love and affection in the continuation of the life of the insured and, if not already included under Subparagraph (a) of this paragraph, who are: 1) related within the third degree or closer, as measured by the civil law system of determining degrees of relation, either by blood or law, to the insured; or 2) stepchildren of the insured.

Legislative History

1978 Comp., § 46A-1-113, enacted by Laws 2011, ch. 124, § 95; 2016, ch. 69,