(a) A life insurance contract may be entered into in which a person paying the consideration for such insurance has no insurable interest in the life of the individual insured, provided that a charitable, benevolent, educational, or religious institution or its agency or any other organization that qualifies under Section 501(c)(3) of the Internal Revenue Code is irrevocably designated as the owner and beneficiary of the contract.

(b) In making such a contract, both the owner and the insured shall make and sign the joint application. The person paying the premium shall irrevocably designate a charitable, benevolent, educational, or religious institution, or an agency of such an institution or any other organization that qualifies under Section 501(c)(3) of the Internal Revenue Code, as the irrevocable owner and beneficiary of such contract.

(c) If a prospective insured applies jointly for a life insurance policy which irrevocably names a 501(c)(3) organization or nonprofit as owner and beneficiary then, at the time of such joint application, an insurable interest is created for the entity in the prospective insured's life. Before an application may be made for such a policy, the insurer shall provide the prospective insured with a written disclosure to remind the prospective insured to consider his or her current state of health and to consult with a tax advisor or estate planner.

(d) Nothing in this section shall prohibit any combination of the applicant, premium payer, owner, and beneficiary from being the same person.

(e) This section does not alter the insurable interest requirements of any other law. (Added 2003, No. 20, § 1.)