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Adia owns a house and has an elderly third cousin living with her. Adia decides she needs fire insurance on the house and a life insurance policy on her third cousin to cover funeral and other expenses that will result from her cousin's death. Adia takes out a fire insurance policy from Ajax Insurance Co. and a $10,000.00 life insurance policy from Beta Insurance Co. on her third cousin. Six months later, Adia sells the house …

…a blood relation, however, not a close relation. The insurable interest would have stemmed from affinity. Adia cared for her elderly third cousin and was concerned about the expenses associated resulting from death including funeral expenses. According to Robert Whitesel with American Family insurance, the policy would not have been issued without first establishing an insurable interest. It could then be concluded that the claim should be paid and the unused premiums should be refunded.