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The Law Pertaining to the Beneficiary
If a policy of life insurance is taken out by one person on the life of another in whom he has an insurable interest, such policy, as previously explained, may be regarded by him as his own property, free from any control whatsoever by the person whose life is insured. But this chapter is concerned primarily with a policy which the insured has taken out on his own life for the benefit of someone whom he has named as beneficiary therein. Yery frequently, the insured sees fit to name gratuitously some beneficiary or beneficiaries, such as his wife, children or near relatives, and sometimes without their having knowledge of his act. This common practice of thus gratuitously designating a beneficiary raises many important legal questions. Under what conditions does the beneficiary's interest become a vested right which cannot be impaired by either the insured or his creditors? Under what conditions may the insured retain sufficient control over his policy to change the beneficiary at will? To what extent is a beneficiary's interest in a policy transmissible to his or her representatives ? What is the effect of a cessation of the beneficiary's insurable interest in the life of the insured prior to the maturity of the contract? To what extent are the rights of a beneficiary in a bankrupt's policy subject to the claims of creditors? These are some of the important questions which, as regards essentials, it is the purpose of this chapter to answer. Sections in Chapter 30.
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