Required when the policy takes effect, not at the time of death (§10110.1(f)).

Self = unlimited insurable interest; any beneficiary may be named.

A creditor has an insurable interest in a debtor; an employer needs the employee's written consent.

SECLE: Survivor protection, Estate creation, Cash accumulation, Liquidity, Estate conservation.

'Life insurance creates an immediate estate' = cash is available at death.

Funding a buy-sell agreement is a business use.

Human life value = present value of future after-tax income.

Needs approach = DIME: Debt, Income, Mortgage, Expenses.

Blackout: from the youngest child's 16th birthday until the surviving spouse turns 60.

Key person: the business owns, pays and is beneficiary; premiums are not deductible.

Cross-purchase = owners buy from each other; entity purchase / stock redemption = the business buys.

Executive bonus premium = taxable income to the executive.

Split dollar: employer pays the cash-value increase portion; employee pays the rest; executive benefit.

Nonqualified deferred compensation may favor selected executives; often funded with life insurance or annuities.

Funeral and burial license: policies/annuities with initial face of $20,000 or less.

STARR: Sharing, Transfer, Avoidance, Retention, Reduction.

Hazard raises the chance of a peril; the peril causes the loss.

Authority: Express (written), Implied (reasonably needed), Apparent (public's reasonable belief).