Hello

I cannot entirely agree with AIG's claim because there indeed was an insurable interest whose existence was validated by the fact that Jim was in a contract with the company and paid premiums to keep the policy active. The insurable interest is neither based on the partnership between Jim and James but on the terms of which Jim paid premiums.

In insurance, insurable interest is the core principle (Arnold-Dwyer, 2020). The financial stake which one has in entering into an insurance contract or policy. Jim is the owner of the insurance policy, and therefore he has an insurable interest. According to the agreement, if the risk of death occurred to James, whom Jim had insured, Jim would pay Jim insurance benefits. Thus, the insurable interest exists based on the policy that Jim has with the company.

In any case of life insurance, what is needed is for the policy-holder to show insurable interest while naming the policy's beneficiaries. So the objective of purchasing such a cover is to benefit financially after the demise of the covered person (Thomas, 2020). In this case, Jim is already in business with James, and they have taken a loan that both should pay. It means that if James passes away before the policy debt is being paid off, Jim will bear the brunt of having to clear the same.

It makes sense that Jim bought the life insurance policy in light of the fact they had entered into a business that involved large sums of money, which Jim would not be able to pay alone. Furthermore, the insurable interest was not based on the existence of the partnership but solely on the contract signed between AIG and Jim.

My question is, With James is gone, how do we know that the business would not be able to function or survive with only Jim at the helm?