In the scenario of Chad and Gabby, what allows Chad to maintain his policy on Gabby's life despite their contentious relationship?

The ability for Chad to maintain his life insurance policy on Gabby's life, even amidst a contentious relationship, is fundamentally rooted in the principle of insurable interest. Insurable interest must be established at the time of the policy application. This means that Chad, at the time he took out the policy on Gabby’s life, had a legitimate interest in ensuring her well-being, which is a prerequisite for taking out life insurance on another person.

Once the policy is in force, the insurable interest is no longer routinely scrutinized, allowing Chad to maintain the policy regardless of their personal circumstances. This principle effectively protects the legitimacy of the insurance contract despite any later disputes or changes in their relationship.

Other options, while they may relate to elements of policyholder rights or processes, do not directly address the essential concept of insurable interest and its critical role at the inception of the insurance contract.