On occasion, insurable interest may exist in the absence of economic interest. Which example illustrates this?

• A. A husband and wife
• B. Siblings
• C. Employer and employee
• D. Friends

Answer: (A)

Insurable interest is present when the policyholder would suffer a financial or emotional loss if the insured dies or becomes ill. Some relationships create this interest even without a direct financial stake. A husband and wife relationship fits here because the loss of a spouse would bring significant emotional distress and potential financial hardship from household expenses, loss of companionship, and support. This makes insurable interest present even though there isn’t necessarily an immediate economic stake.

The other examples rely on economic ties or are less clearly tied to emotional dependency in a way that automatically establishes insurable interest without economic interest, so they don’t illustrate the concept as cleanly.