In which relationship would there NOT be insurable interest?

• A. Spouse to Spouse
• B. Business Owner to Business Customer
• C. Parent to Child
• D. Employer to Employee

Answer: (B)

Insurable interest means the policyowner would suffer a financial loss or hardship if the insured dies, and it must exist when the policy is issued. Relationships like spouse-to-spouse, parent-to-child, and employer-to-employee all involve a direct financial stake: a spouse provides shared income and dependency, a parent has a natural concern for a child’s welfare, and an employer relies on an employee’s continued life for productivity, profits, and return on training or investment.

A business owner insuring a business customer’s life generally does not create that kind of economic stake. The death of a customer doesn’t typically threaten the business’s finances in the way that a debt, contract, or employment relationship would. Without a link like a loan (creditor-debtor), key person, or other documented financial dependency, there isn’t an insurable interest.

So, in standard life insurance practice, the relationship between a business owner and a business customer would be the one without insurable interest.