(1) In this section: (a) “Relative” means a spouse or individual related within the 1st, 2nd, or 3rd degree of kinship under s. 990.001 (16). (b) “Settlor” means a person that executes a trust instrument and includes a person for whom 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, all of the following apply: (a) The insured is any of the following: 1. A settlor of the trust. 2. An individual in whom a settlor of the trust has, or would have had if living at the time the policy was issued, an insurable interest. (b) The life insurance proceeds are primarily for the benefit of one or more trust beneficiaries who have any of the following: 1. An insurable interest in the life of the insured. 2. A substantial interest engendered by love or affection in the continuation of the life of the insured and, if not included under subd. 1., the beneficiary is a relative or stepchild of the insured.
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