Answered

An individual most likely will have an insurable interest in insuring a person's life if


Athere is any blood relationship with the insured
Ba business relationship exists
Can economic interest exists for the continuance of the insured's life
Da financial interest exists at the time of insured's death

Verified Answer :

Final answer:

An individual is likely to have an insurable interest in another person's life if they have an economic interest in the insured's continued existence. This could be through personal relationships or business connections. In these cases, the policyholder would face financial harm if the insured were to pass away.


Explanation:

Understanding Insurable Interest

In insurance, an insurable interest exists when a policyholder would suffer a financial loss or hardship if the insured person were to die. This principle is essential in determining the validity of life insurance policies. An individual most likely will have an insurable interest in insuring a person's life if:

  1. The insured has a blood relationship with the policyholder.
  2. A business relationship exists between the insured and the policyholder.
  3. An economic interest exists for the continuance of the insured's life.

Among the choices provided, option C is the most accurate. An economic interest implies that the policyholder benefits substantially by the insured living or suffers a loss if the insured dies. For instance, a business partner may have an economic interest in the life of a co-owner, as their demise could lead to financial complications for the business.


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