KRS 386B.1-120: Insurable interest of trustee.

(1) As used in this section, "settlor" means a person that executes a trust instrument.

The term includes a person for which a fiduciary or agent is acting.

(2) A trustee of a trust has an insurable interest in the life of an individual insured under

a life insurance policy that is owned by the trustee of the trust acting in a fiduciary

capacity or that designates the trust itself as the owner if, on the date the policy is

issued:

(a) The insured is:

1. A settlor of the trust; or

2. An individual in whom a sett lor of the trust has, or would have had if

living at the time the policy was issued, an insurable interest; and

(b) The life insurance proceeds are primarily for the benefit of one (1) or more

trust beneficiaries that have:

1. An insurable interest in the life of the insured; or

2. A substantial interest engendered by love and affection in the

continuation of the life of the insured and, if not already included under

subparagraph 1. of this paragraph, who are:

a. Related within the third degree or closer, a s measured by the civil

law system of determining degrees of relation, either by blood or

law, to the insured; or

b. Stepchildren of the insured.