The national guide covers the basics of life and health insurance: insurable interest, the application, underwriting and policy delivery. Delaware writes several of these rules into 18 Del. C. Chapter 27.

Insurable interest (18 Del. C. 2704, 2705)

• Benefits on another person's life must be payable to the insured, the insured's representatives, or someone with an insurable interest when the contract was made. In property insurance, insurable interest is needed at the time of loss (2706).
• Close relatives by blood or law have an insurable interest based on love and affection. Others need a lawful and substantial economic interest in the insured's continued life (2704(c)).
• Charities: a policy may be issued without an insurable interest when a charitable, benevolent, educational or religious institution is named as the irrevocable beneficiary and the insured also signs the application (2705).

Consent and capacity

• Consent: a life or health policy on an individual, other than group or blanket coverage, requires the insured to apply or consent in writing (2708). Exceptions include:
  • a spouse insuring the other spouse
  • insurance on a minor
  • family policies signed by a parent or spouse
  • employer coverage on employees
• Minors: a minor 15 or older may buy and own insurance or annuities on his own life, with a parent's or guardian's consent unless emancipated (2707).

Applications

• An application can't be used as evidence unless a true copy was attached to the policy when it was issued. Industrial life is an exception (2710).
• Representations: application statements are representations, not warranties. A misstatement bars recovery only if it was fraudulent, material to the risk, or the insurer in good faith wouldn't have issued the policy on the same terms (2711).

Exam traps

• Insurable interest for life insurance is needed at inception. For property, it is needed at the loss.
• A minor can own a policy on his own life at 15.
• A charity beneficiary needs no insurable interest if the designation is irrevocable.