In 1911 something interesting happened, the US Supreme Court made a ruling in the Grigsby vs Russell that allowed a person to essentially ‘sell their interest’ in their own life assurance policy. The case was over a condition in an insurance policy that it shall be ‘void for non-payment of premiums’ as being only that it shall be voidable at option of the company. In other words, it wasn’t just up to the company’s (issuers) discretion. The second issue was the rule of public policy that forbids the taking out of insurance by one on the life of another in which he has no insurable interest does not apply to the assignment by the insured of a perfectly valid policy to one not having an insurable interest.
The idea of ‘insurable interest’ still stands as a central tenet in insurance, for instance, I can’t take out a life assurance policy on a stranger because I face no loss in the event of their death, in fact, if you were the beneficiary of …