Insurable interest does NOT occur in which relationship?

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

Answer: (A)

Insurable interest means you must stand to suffer a financial or economic loss if the insured dies. That stake must exist at the time the policy is issued.

Spouse to spouse has insurable interest because both spouses typically rely on each other financially and emotionally; a death would create a financial impact on the survivor. Parent to child also has insurable interest, since parents have a financial obligation and would be affected economically by a child’s death. Employer to employee has insurable interest too, especially for key employees or when the employer would face a financial loss if the employee dies.

Business owner to business client, however, generally does not create an insurable interest. There isn’t an inherent, direct financial stake if the client dies—the business isn’t dependent on the client’s life in the same way as family or a key employee. Unless there’s a specific contract or other concrete dependency showing a loss, this relationship typically lacks insurable interest.

So the relationship that does not have insurable interest is the business owner–business client relationship.