Wisconsin Statutes
Wis. Stat. § 631.07 (2026)
Insurable interest and consent
✓ current as of July 2026
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631.07(1)(1) Insurable interest. No insurer may knowingly issue a policy to a person without an insurable interest in the subject of the insurance.
631.07(2)(2) Consent in life and disability insurance. Except under sub. (3), no insurer may knowingly issue an individual life or disability insurance policy to a person other than the one whose life or health is at risk unless the latter has given written consent to the issuance of the policy. Consent may be expressed by knowingly signing the application for the insurance with knowledge of the nature of the document, or in any other reasonable way.
631.07(3)(a)(a) Consent unnecessary. A life or disability insurance policy may be taken out without consent in any of the following cases:
631.07(3)(a)2.2. A creditor may at the expense of the creditor obtain life or disability insurance on the debtor in an amount reasonably related to the amount of the debt.
631.07(3)(a)3.3. A person may obtain a life or disability insurance policy on members of the person’s family living with or dependent on the person.
631.07(3)(a)3m.3m. A person may obtain a disability insurance policy on a child placed for adoption, as defined in s. 632.896 (1) (c), with the person.
631.07(3)(a)4.4. A person may obtain a disability insurance policy on others that would merely indemnify against expenses the policyholder would be legally or morally obligated to pay.
631.07(3)(am)(am) Insurance for persons in international public service. The commissioner may promulgate rules permitting issuance of insurance for a limited term on the life or health of a person serving outside the continental United States in the public service of the United States, provided the policyholder is closely related by blood, marriage or adoption to the person whose life or health is insured.
631.07(3)(b)1.1. A parent, a guardian of the person, or a person having legal custody as defined in s. 48.02 (12) may consent to the issuance of a policy on a dependent child.
631.07(3)(b)2.2. A grandparent may consent to the issuance of life or disability insurance on a grandchild.
631.07(3)(b)3.3. A court of general jurisdiction may give consent on ex parte application on the showing of any facts the court considers sufficient to justify such insurance.
631.07(4)(4) Effect of lack of insurable interest or consent. No insurance policy is invalid merely because the policyholder lacks insurable interest or because consent has not been given, but a court with appropriate jurisdiction may order the proceeds to be paid to someone other than the person to whom the policy is designated to be payable, who is equitably entitled thereto, or may create a constructive trust in the proceeds or a part thereof, subject to terms and conditions of the policy other than those relating to insurable interest or consent.
631.07 HistoryHistory: 1975 c. 373, 375, 422; 1977 c. 354 s. 101; 1989 a. 336; 1999 a. 85; 1999 a. 162 s. 23; 2001 a. 38.
631.07 AnnotationThe proceeds of a casualty insurance policy purchased by a land contract vendee that named the vendor as mortgagee were properly awarded to the vendor under sub. (4) when, following confirmation of a strict foreclosure judgment against the vendee, the insured premises were destroyed by fire. Disrud v. Arnold, 167 Wis. 2d 177, 482 N.W.2d 114 (Ct. App. 1992).
631.07 AnnotationA stockholder may have an insurable interest in corporate property. Heyden v. Safeco Title Insurance Co., 175 Wis. 2d 508, 498 N.W.2d 905 (Ct. App. 1993).
631.07 AnnotationA contract of insurance upon a life in which the insured has no interest is a pure wager. Nevertheless, sub. (4) makes clear that the beneficiary of the policy is entitled to the policy proceeds. Section 895.055, with immaterial exceptions, voids all gambling contracts, but s. 600.12 (2) provides that, if a section in chs. 600 to 655 conflicts with another statutory provision, the section in chs. 600 to 655 governs. Sun Life Assurance Co. of Canada v. U.S. Bank National Ass’n, 839 F.3d 654 (2016).
631.07 AnnotationWhile article IV, section 24, of the Wisconsin Constitution states that “except as provided in this section, the legislature may not authorize gambling in any form,” the legislature has not authorized gambling in sub. (4). Gambling contracts, including life insurance policies that lack an insurable interest, are still forbidden. The statute changed only the remedy for violation, from invalidation of the policy to requiring the insurer to cough up the proceeds rather than being allowed to keep all the premiums and pay nothing to the policy holder because the latter had no insurable interest in the policy. Sun Life Assurance Co. of Canada v. U.S. Bank National Ass’n, 839 F.3d 654 (2016).
Notes of Decisions
Cited in 12
cases (5 in the last 5 years), 1984–2025 · leading case: Sun Life Assurance Co. of Canada v. U.S. Bank Nat'l Ass'n, 839 F.3d 654 (7th Cir. 2016).
Sun Life Assurance Co. of Canada v. U.S. Bank Nat'l Ass'n, 839 F.3d 654 (7th Cir. 2016). “” Wis. Stat. § 631.07 (4). The legislature reasoned that “the best way to discourage insurers from issuing insurance policies to persons without insurable interest is to make them [the life insurance companies] pay if they do, not to permit them freely to issue such policies…”
Disrud v. Arnold, 482 N.W.2d 114 (Wis. Ct. App. 1992). “Arnold argues that: (1) Arnold's bankruptcy discharge extinguishes Disrud's claim; (2) the foreclosure judgment extinguishes Disrud's claim in the proceeds; (3) Arnold is entitled to the insurance proceeds under the express policy language; (4) sec. 631.07(4), Stats., does not…”
Martin v. Tower Ins. Co., Inc., 349 N.W.2d 90 (Wis. Ct. App. 1984). “Because under sec. 631.07(4), Stats., a policy is not invalid merely because the policyholder lacks an insurable interest, we reverse the judgment and remand this matter to the trial court with directions to reinstate the complaint.”
Sun Life Assurance Co. of Canada v. Wells Fargo Bank NA (080669) (Statewide), 208 A.3d 839 (N.J. 2019). “Nor does New Jersey have an analogue to Wis. Stat. 631.07(4), which provides that "[n]o insurance policy is invalid merely because the policyholder lacks insurable interest.”
Hemad Enter., Inc. v. Endurance Am. Specialty Ins., 308 F.R.D. 191 (E.D. Wis. 2015). “” In support of this statement, Endurance cited Wis. Stat. § 631.07 (4), which governs insurance policies and permits “a court with appropriate jurisdiction” to order the payment of proceeds “to someone other than the person to whom the policy is designated to be payable, who is…”
Hendricks v. M.C.I., Inc., 448 N.W.2d 289 (Wis. Ct. App. 1989). “may order the proceeds to be paid to someone other than the person to whom the policy is designated to be payable, who is equitably entitled thereto, or may create a constructive trust in the proceeds or a part thereof.”
Vida Longevity Fund, L.P. v. Gold (E.D.N.Y 2025). “” Wis. Stat. § 631.07 (1). In other words, a person who takes out a life insurance policy must have an interest, either financial or familial, in the life of the insured continuing instead of ending prematurely.”
Est. of Russel Mechling v. U.S. Bank Nat'l Ass'n (D. Conn. 2025). “at 17 (citing Wis. Stat. § 631.07 (1)). While the Court does not reach the issue of Section 631.”
Midwest Com. Funding LLC v. Cincinnati Specialty Underwriters Ins. Co. (E.D. Wis. 2019). “§ 631.07 (4). Instead, if an insurer issues a policy to a person who lacks an insurable interest, the insurer is still liable to provide coverage under the policy, but the court may order the proceeds to be paid to someone other than the insured—i.”
Est. of Jacqueline Hopfinger v. U.S. Bank Nat'l Ass'n (D. Minnesota 2025). “” Wis. Stat. § 631.07 (1) (2024). However, Wisconsin law does not automatically render a policy invalid for lack of an insurable interest.”
Est. of John C. Breslin v. U.S. Bank Nat'l Ass'n (D. Minnesota 2025). “” See Wis. Stat. § 631.07 (1) (2024). However, Wisconsin law does not automatically render a policy invalid for lack of an insurable interest.”
Est. of Susan Jacobs v. U.S. Bank Nat'l Ass'n (D. Minnesota 2025). “” Wis. Stat. § 631.07 (1) (2024). However, Wisconsin law does not automatically render a policy invalid for lack of an insurable interest.”
— Wis. Stat. § 631.07(4) — 4 cases
Disrud v. Arnold, 482 N.W.2d 114 (Wis. Ct. App. 1992). “Arnold argues that: (1) Arnold's bankruptcy discharge extinguishes Disrud's claim; (2) the foreclosure judgment extinguishes Disrud's claim in the proceeds; (3) Arnold is entitled to the insurance proceeds under the express policy language; (4) sec. 631.07(4), Stats., does not…”
Martin v. Tower Ins. Co., Inc., 349 N.W.2d 90 (Wis. Ct. App. 1984). “Because under sec. 631.07(4), Stats., a policy is not invalid merely because the policyholder lacks an insurable interest, we reverse the judgment and remand this matter to the trial court with directions to reinstate the complaint.”
Sun Life Assurance Co. of Canada v. Wells Fargo Bank NA (080669) (Statewide), 208 A.3d 839 (N.J. 2019). “Nor does New Jersey have an analogue to Wis. Stat. 631.07(4), which provides that "[n]o insurance policy is invalid merely because the policyholder lacks insurable interest.”
Hendricks v. M.C.I., Inc., 448 N.W.2d 289 (Wis. Ct. App. 1989). “may order the proceeds to be paid to someone other than the person to whom the policy is designated to be payable, who is equitably entitled thereto, or may create a constructive trust in the proceeds or a part thereof.”
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