Susan and Ann, close friends, took out insurance policies on each otherâ€™s life, each being the beneficiary of the otherâ€™s policy. When Susan died, the insurance company refused to pay the proceeds to Ann, claiming that she did not have an insurable interest in Susanâ€™s life. Was the insurance company correct?
Â Garth applied for a life insurance policy. On the application, he stated â€œnoneâ€ in response to a question asking whether he had any hobbies, even though he was a famous stamp collector. When he died, the insurance company refused to pay the policy proceeds on the grounds that Garth had lied on the application for insurance. Was the insurance company correct?