Insuring children is restricted, under age 10 the amount you can insure a child is limited to premiums paid plus interest, to protect minors.
If an insurer has issued a product with a substantial sum insured on a child then what is the purpose? Are they entitled to do that? Or was the product established with a reason other than insurance in mind. Although New Zealand no longer requires an insurable interest the reform of that requirement assumed that an insurance company is already sufficiently interested to ensure that it does not issue cover in circumstances where interest is very limited. It seems plain to me that insurers were not being encouraged to forget about the issue altogether.