Legal Question in Business Law in Oklahoma

Life insurance policy validity after a sale of ownership of a business

My father in law is a minority partner of a company. twenty years ago they took out a life insurance policy on himself and the other partners. This is a term life insurance policy with no cash value. Once he sells his interest in the company to his other partner can the company keep the policy once they have no insurable interest? and does he have the right to continue paying the premiums on the policy and change the benificiary's to his family?


Asked on 9/11/07, 11:56 pm

1 Answer from Attorneys
Marsha Dixon

Re: Life insurance policy validity after a sale of ownership of a business

No. They should not have any insurable interest on your father if he is "legally" no longer recognized or considered a partner in the company and this clause should be included as an addendum in the desolution, sell or revision or their partnership agreement. In fact, it is recommended.

Secondly, business policies are not considered, by law, as the same or simular when considering the interest of private or family members. He may want to consider getting a new policy.

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Answered on 9/17/07, 1:57 pm


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