life insurance & Health insurance

life insurance & Health insurance

In life insurance, the contract is without effect if at the time of contacting it, the policyholder has no insurable interest in the life or health of the insured. A person has an insurable interest in his own life and health and in the life and health: (a) of his consort, (b) of his descendants and of those of his consort, whatever their filiation, (c) of any person upon whom he is dependent for support or education, (d) of any person in whose life and health the insured has a pecuniary interest.

The creditor has an insurable interest in the life of the debtor that is equal to the amount of the debt and interest. Business relationships, other than that of a creditor and a debtor, can justify that an employer has an insurable interest on a key employee, a partner, a board officer. In all cases, however, the person being insured must agree to the proposed contract.

The absence of an insurable interest does not prevent the formation of the contract if the insured gives his written consent. Contrary to property and liability insurance contacts, life insurance contracts make no reference to indemnification

because the value of a human life is not defined. Therefore there is no problem of duplicate insurance. In fact there is no problem if an individual wants to buy several life insurance contracts with one or more insurance companies. For the same reason, life insurers do not posses subrogation rights.

In Health insurance,

 In Health insurance, all types of medical expense coverages are contracts of indemnity and are similar to property and liability contracts. On the other hand, income replacement paid under health insurance contracts must be assimilated to a life insurance type of coverage