Montana Code Annotated 2021



Part 2. Insurable Interests

Restrictions On Contracting For Personal Insurance -- Insurable Interests -- Violation

33-15-201. Restrictions on contracting for personal insurance -- insurable interests -- violation. (1) Any individual of competent legal capacity may procure or effect an insurance contract upon the individual's own life or body for the benefit of any person. However, a person may not procure or cause to be procured any insurance contract upon the life or body of another individual unless the benefits under the contract are payable to the individual insured, to the individual's personal representatives, or to a person having, at the time when the contract was made, an insurable interest in the individual insured.

(2) If the beneficiary, assignee, or other payee under any contract made in violation of this section receives from the insurer any benefits under the contract accruing upon the death, disablement, or injury of the individual insured, the individual insured or the individual's personal representative may maintain an action to recover the benefits from the person receiving them.

(3) "Insurable interest" with reference to personal insurance includes only interests as follows:

(a) in the case of individuals related closely by blood or by law, a substantial interest engendered by love and affection;

(b) in the case of other persons, a lawful and substantial economic interest in having the life, health, or bodily safety of the individual insured continue, as distinguished from an interest that would arise only by or would be enhanced in value by the death, disablement, or injury of the individual insured.

(4) An individual who is a party to a contract or option for the purchase or sale of an interest in a business partnership or firm or of shares of stock of a closed corporation or of an interest in the shares has an insurable interest in the life of each individual party to the contract and for the purposes of the contract only in addition to any insurable interest that may otherwise exist as to the life of the individual.

(5) A charitable institution has an insurable interest in an individual if:

(a) the individual authorizes the charitable institution to purchase insurance naming the charitable institution as an irrevocable beneficiary; and

(b) the insurance is purchased with contributions made by the individual.

History: En. Sec. 261, Ch. 286, L. 1959; R.C.M. 1947, 40-3704; amd. Sec. 148, Ch. 575, L. 1981; amd. Sec. 3, Ch. 670, L. 1991; amd. Sec. 1185, Ch. 56, L. 2009.