Editor's notes.

- In light of the similarity of the statutory provisions, decisions under former Civil Code 1895, § 2114, former Civil Code 1910, §§ 2496, 2498, and former Code 1933, §§ 56-901, 56-903, repealed by Ga. L. 1960, p. 289, enacting this title, are included in the annotations for this Code section.

Person with no insurable interest cannot procure insurance on another's life.

- Person who has no insurable interest in the life of another person cannot procure and maintain a policy of insurance on the life of such person, naming the first person as the beneficiary. Gulf Life Ins. Co. v. Davis, 52 Ga. App. 464, 183 S.E. 640 (1936) (decided under former Code 1933, §§ 56-901, 56-903).

Contract of insurance entered into between a person named as beneficiary therein and an insurance company, insuring another in whose life the beneficiary has no insurable interest, is void from the contract's inception, being a wagering contract and against public policy. Wilson v. Progressive Life Ins. Co., 61 Ga. App. 617, 7 S.E.2d 44 (1940) (decided under former Code 1933, §§ 56-901, 56-903).

Void policy does not invalidate second valid policy to another.

- Insurance company may not take advantage of the company's own illegal and void contract to escape liability on a legal and binding one; hence the issuance of a first insurance contract on an orphaned child's life to the child's great-aunt, who had no insurable interest therein, did not invalidate a second policy, issued to the child's grandfather. Wilson v. Progressive Life Ins. Co., 61 Ga. App. 617, 7 S.E.2d 44 (1940) (decided under former Code 1933, §§ 56-901, 56-903).

One has an insurable interest in life of one's spouse under subsection (a) of this section. Beiter v. Decatur Fed. Sav. & Loan Ass'n, 222 Ga. 516, 150 S.E.2d 687 (1966).

Relationship of sibling is close enough to qualify for an insurable interest under subsection (a) of this section. United Ins. Co. of Am. v. Hadden, 126 Ga. App. 362, 190 S.E.2d 638 (1972).

One has no insurable interest in life of one's brother-in-law merely because of the existence of such relationship. Chandler v. Mutual Life & Indus. Ass'n, 131 Ga. 82, 61 S.E. 1036 (1908) (decided under former Civil Code 1895, § 2114).

Relationship of uncle and nephew will not support an insurable interest. Doody Co. v. Green, 131 Ga. 568, 62 S.E. 984 (1908) (decided under former Civil Code 1895, § 2114).

Adult children.

- When a parent brought suit to recover the benefits under a policy of life insurance insuring the life of an adult son, the trial court erred in only partially denying the insurer's motion for summary judgment by holding that the insurer had waived the statutory requirement prohibiting the issuance of a valid life insurance policy without the written consent of the insured. Under circumstances not qualifying for an exception pursuant to O.C.G.A. § 33-24-6(a)(1)-(4), the policy was void ab initio, and unenforceable by the courts; written consent of the insured may not be waived. Time Ins. Co. v. Lamar, 195 Ga. App. 452, 393 S.E.2d 734 (1990).

Insurable interest may be based upon pecuniary expectation instead of kinship.

- Insurable interest is not necessarily dependent upon marital relation or kinship by affinity or consanguinity. In a broad sense it may be said that anyone has an insurable interest in the life of another when one feels sufficient interest in another's welfare, for any reason, either to substantially assist the other during the other's life, or to make the other a gift after death, which one perhaps may not be able to do during life. Grand Lodge Knights of Pythias v. Barnard, 9 Ga. App. 71, 70 S.E. 678 (1911); McFarland v. Robertson, 137 Ga. 132, 73 S.E. 490 (1911), later appeal, 142 Ga. 266, 82 S.E. 643 (1914); Cherokee Life Ins. Co. v. Banks, 15 Ga. App. 65, 82 S.E. 597 (1914) (decided under former Civil Code 1019, § 2496).

As a general rule, a reasonable expectation of pecuniary gain or advantage through the continued life of another person and consequent loss by reason of that person's death creates an insurable interest. National Life & Accident Ins. Co. v. Parker, 67 Ga. App. 1, 19 S.E.2d 409 (1942) (insurable interest in stepson shown as matter of law) (decided under former Code 1933, §§ 56-401, 56-903).

One partner has insurable interest in life of other.

- As the continuance of a partnership affords a reasonable expectancy of advantage and benefit to one partner, a partner had an insurable interest in the life of the copartner, and as the beneficiary named in the policy issued on the life of such copartner, was entitled to receive and retain the entire proceeds thereof. Rush v. Howkins, 135 Ga. 128, 68 S.E. 1035 (1910) (decided under former Civil Code 1895, § 2114).

Creditor has limited insurable interest in life of debtor.

- Creditor has, for the purpose of indemnifying the creditor against loss, but for no other, an insurable interest in the life of a debtor, but this interest cannot exceed in amount that of the indebtedness to be secured. Such indebtedness may, however, include the cost of taking out and keeping up the insurance, if made a charge against the debtor, or the debtor's estate, or upon the proceeds of the policy when collected. Exchange Bank v. Loh, 104 Ga. 446, 31 S.E. 459, 44 L.R.A. 372 (1898) (decided under former Civil Code 1895, § 2114).

Conditions permitting employer to have insurable interest in employee.

- Employer does not have an insurable interest in the life of an employee solely because of the relationship of employer and employee, but in order for such to appear it must be shown that the employer had a substantial economic interest in the life of the employee; that is, that by virtue of the relationship the employer might be reasonably expected to reap a substantial pecuniary benefit through the continued life of such employee, and to sustain consequent loss upon the employee's death. Turner v. Davidson, 188 Ga. 736, 4 S.E.2d 814 (1939) (decided under former Code 1933, § 56-901, 56-903).

Mere fact that at the time policy was issued employee was under contract to an employer for a period of approximately one year does not, standing alone, disclose an insurable interest of the employer in the life of the employee. Turner v. Davidson, 188 Ga. 736, 4 S.E.2d 814 (1939) (decided under former Code 1933, § 56-901, 56-903).

For an employer to have an insurable interest in the life of an employee, it should appear from the nature and character of the employment and the services rendered, their importance to the business conducted, and the character and particular ability of the employee, that the employee's death would be reasonably expected to result in substantial pecuniary loss to the employer. Turner v. Davidson, 188 Ga. 736, 4 S.E.2d 814 (1939) (decided under former Code 1933, § 56-901, 56-903).

When an employer has a substantial economic interest in the life of an employee, that is, when the employer might be reasonably expected to reap a substantial pecuniary benefit through the continued life of such employee, and sustain consequent loss upon the employee's death, a policy of insurance taken out by the employer in good faith to protect the employer's interest in the employee should be upheld. Turner v. Davidson, 188 Ga. 736, 4 S.E.2d 814 (1939) (decided under former Code 1933, § 56-901, 56-903).

Performance of ordinary duties by employee is not enough.

- Small and insignificant economic readjustment which would normally follow the death of an employee performing ordinary duties requiring no special skill or knowledge would not give the employer an insurable interest in the life of the employee. Turner v. Davidson, 188 Ga. 736, 4 S.E.2d 814 (1939) (decided under former Code 1933, § 56-901, 56-903).

One may insure own life and assign to another not having insurable interest.

- One has a right to procure an insurance policy on one's own life and to assign it to another who has no insurable interest in the insured's life, provided it be not done by way of cover for a wagering contract. Quillian v. Johnson, 122 Ga. 49, 49 S.E. 801 (1905); Atlanta Sav. Bank v. Downing, 122 Ga. 692, 51 S.E. 38 (1905); Rylander v. Allen, 125 Ga. 206, 53 S.E. 1032, 6 L.R.A. (n.s.) 128, 5 Ann. Cas. 355 (1906); Sprouse v. Skinner, 155 Ga. 119, 116 S.E. 606 (1923); Hawkes v. Mobley, 174 Ga. 481, 163 S.E. 494 (1932); United Ins. Co. of Am. v. Hadden, 126 Ga. App. 362, 190 S.E.2d 638 (1972).

Meaning of this section is that one may insure one's own life without qualification, but that one may not insure the life of another unless one has an interest in the continuance of the life of that other. Necessarily, in the first instance, the amount of the policy is to be paid someone other than the insured because ordinarily under the contract the amount is not payable until one's death. Union Fraternal League v. Walton, 109 Ga. 1, 34 S.E. 317, 77 Am. St. R. 350, 46 L.R.A. 424 (1899), later appeal, 112 Ga. 315, 37 S.E. 389 (1900) (decided under former Civil Code 1895, § 2114).

Person has an unlimited insurable interest in his or her own life, and when there is no intent to enter into a wagering contract, and classes of beneficiaries are not restricted, one may lawfully take out a policy of insurance on one's life and have the same made payable to whomsoever one pleases, regardless of whether the beneficiary so designated has an insurable interest in the insured's life. Quinton v. Millican, 196 Ga. 175, 26 S.E.2d 435 (1943).

One may make policy on one's life payable to paramour.

- Regular life insurance policy, issued to a person on the person's own life and in favor of a paramour, may, if not otherwise invalid, be collected by the paramour, and when the paramour is designated by name, although the words "whose relationship to me is that of wife" are added, the paramour rather than the lawful spouse is entitled to the proceeds. Quinton v. Millican, 196 Ga. 175, 26 S.E.2d 435 (1943) (decided under former Code 1933, § 56-901, 56-903).

Assignment of policy to attending physician held not invalid.

- Assignment of a life insurance policy to a physician who is rendering professional services to the assignor, by an agreement that the physician will continue to render the services to the assignor and the assignor's spouse so long as both of them shall remain in life, when the policy had an infinitesimal cash surrender value and was about to lapse for nonpayment of the premium, and the assignment is bona fide and not the result of fraud, is not as a matter of law a wagering contract and invalid and unenforceable. Hall v. Simmons, 50 Ga. App. 634, 179 S.E. 272 (1935) (decided under former Code 1933, § 56-901, 56-903).

"To be paid to assignee" construed.

- Ruling which interprets the words "to be paid to an assignee" to import that such assignee need not have an insurable interest is not construction, but is judicial amendment. Mutual Life Ins. Co. v. Lane, 151 F. 276 (C.C.E.D. Ga.), aff'd, 157 F. 1002 (5th Cir. 1907), cert. denied, 208 U.S. 617, 28 S. Ct. 569, 52 L. Ed. 647 (1908) (decided under former Civil Code 1895, § 2114).

Liability in naming person with no insurable interest as beneficiary.

- Insurer can incur no liability for increasing risk to life of insured by issuing to insured a policy designating as beneficiary a person with no insurable interest in the insured's life if the policy is procured with knowledge of and at the behest of the insured. Burton v. John Hancock Mut. Life Ins. Co., 164 Ga. App. 592, 298 S.E.2d 575 (1982).

If duty of reasonable care not to increase risk of harm to insured in connection with issuance of life insurance policies does exist under Georgia law, such duty could arise only when insurance company issues a policy that both is prohibited by statute or common law and increases risk of danger to the insured's person. Burton v. John Hancock Mut. Life Ins. Co., 164 Ga. App. 592, 298 S.E.2d 575 (1982).

Insurance company can breach no common law or statutory duty owed to insured by failing to inquire into insured's motive or intent in applying for insurance and naming as beneficiary a person with no insurable interest. Burton v. John Hancock Mut. Life Ins. Co., 164 Ga. App. 592, 298 S.E.2d 575 (1982).

Cited in Employers' Fire Ins. Co. v. Pennsylvania Millers Mut. Ins. Co., 116 Ga. App. 433, 157 S.E.2d 807 (1967); Fidelity Bankers Life Ins. Co. v. Renew, 121 Ga. App. 883, 176 S.E.2d 103 (1970); First of Ga. Ins. Co. v. Josey, 129 Ga. App. 14, 198 S.E.2d 381 (1973); Bohannon v. Manhattan Life Ins. Co., 555 F.2d 1205 (5th Cir. 1977); Georgia Mut. Ins. Co. v. Cook, 151 Ga. App. 328, 259 S.E.2d 717 (1979).

Common law definition not broadened.

- General Assembly, in defining "insurable interest" in this section, did not intend to broaden the common law definition. 1963-65 Op. Att'y Gen. p. 469.

Insurable interest may be based on kinship or pecuniary advantage.

- Language, "a substantial interest engendered by love and affection in the case of individuals closely related by blood or by law," as used in subsection (a) of this Code section, was intended to embrace the common law concept of an insurable interest recognized in individuals closely related by blood or by law; that is to say that the relationships of husband and wife, father and mother, son and daughter, and vice versa would constitute an insurable interest by virtue of their relationship alone, without showing a pecuniary interest or advantage; also, others closely related by blood or law would come within this same classification in cases of special circumstances in which they are substituted for one of the individuals creating this same close relationship; all other persons, in order to show an insurable interest, must satisfy the first part of this section relating to a pecuniary advantage. 1963-65 Op. Att'y Gen. p. 469.

Aunt or grandmother must have financial relationship for insurable interest.

- Aunt does not have sufficient insurable interest in the life of her infant niece or nephew, there being no financial dependency between them, to entitle the aunt to apply for and obtain a policy of life insurance upon the life of such niece or nephew, and under the same circumstances, a grandmother may not apply for such insurance. 1963-65 Op. Att'y Gen. p. 469.

Lifetime owner of policy with right to change beneficiary must have insurable interest.

- When the applicant, the lifetime owner of the policy, has control of the policy and therefore may change beneficiaries at any time during the life of the insured without regard to any consent being given by the previous beneficiary or the insured, such lifetime owner must satisfy the requirements of subsection (c) of former Code 1933 § 56-2405 (see O.C.G.A. § 33-24-3) with reference to insurable interest as well as former Code 1933 § 56-2407 (see O.C.G.A. § 33-24-6) with reference to consent of the insured. In order to satisfy subsection (c), the benefits of the policy must be payable to the individual insured or the insured's personal representative, or to a person having, at the time when such contract was made, an interest in the individual insured; in order to satisfy former Code 1933, § 56-2407, such lifetime owner, in order to come within the exception, must have an insurable interest in the life of the minor whose life is insured. The wording of "no life insurance . . . contract upon an individual . . . shall be made or effectuated . . ." clearly would include the applicant who is the lifetime owner regardless of whether such applicant or owner is the named beneficiary in the policy. 1963-65 Op. Att'y Gen. p. 469.

Am. Jur. 2d.

- 43 Am. Jur. 2d, Insurance, §§ 938, 974, 975.

C.J.S.

- 44 C.J.S., Insurance, § 317 et seq.

ALR.

- Effect on insurance contract of wagering assignment thereof, 5 A.L.R. 837; 53 A.L.R. 1403.

Who are "blood relatives" within statute or rules as to beneficiaries of insurance in mutual benefit societies, 10 A.L.R. 864.

Insurance: insurable interest of fiance or fiancee, 17 A.L.R. 580.

Right of insolvent to insure life for benefit of relatives, 31 A.L.R. 51; 34 A.L.R. 838.

Effect of erroneous designation of beneficiary of insurance as "wife,", 32 A.L.R. 1481.

Divorce decree as affecting a change of ownership or interest within policy of insurance, 48 A.L.R. 1232.

Insurable interest in life of co-obligor, 50 A.L.R. 366.

Divorce of insured and beneficiary as affecting the latter's right in life insurance, 52 A.L.R. 386; 175 A.L.R. 1220.

Constitutionality, construction, and application of statutes relating to insurance on life of one person for benefit of another who has no insurable interest, 108 A.L.R. 449.

Life policy or collateral agreement under which benefits on death of one member of a group or class of policyholders who has no insurable interest in lives of one another are to be shared surviving members, as contrary to public policy as a wagering contract, 121 A.L.R. 725.

Insurable interest of employer in respect of injury or death of employee for which he is not legally responsible, 122 A.L.R. 1189.

Insurable interest of employer in life of employee, 125 A.L.R. 408.

Immoral relations between insured and beneficiary as affecting liability of insurer or rights in respect of proceeds policy, 173 A.L.R. 716.

Life insurance: right to raise question of lack of insurable interest, 175 A.L.R. 1276.

Rights and remedies under contract by party to procure insurance on his own life, 12 A.L.R.2d 983.

Insurable interest of partner or partnership in life of partner, 70 A.L.R.2d 577.

Insured's ratification, after loss, of policy procured without his authority, knowledge, or consent, 52 A.L.R.3d 235.

Payment of premiums by corporation on corporate officer's life insurance policy as affecting right to policy, 56 A.L.R.3d 1086.

Divorce: provision in decree that one party obtain or maintain life insurance for benefit of other party or child, 59 A.L.R.3d 9.

Insurable interest of brother or sister in life of sibling, 60 A.L.R.3d 98.

Estoppel of, or waiver by, issuer of life insurance policy to assert defense of lack of insurable interest, 86 A.L.R.4th 828.

Insurable interest of foster child or stepchild in life of foster or step parent, or vice versa, 35 A.L.R.5th 781.