MANAGEMENT

Detailed explanation-1: -Insurable interest just means that the subject matter of the contract must provide some financial gain by existing for the insured (or policyholder) and would lead to a financial loss if damaged, destroyed, stolen, or lost.

Detailed explanation-2: -Principle of Insurable Interest:-According to this principle, the insured must have an insurable interest in the subject matter of the insurance policy. Without the interest, taking an insurance policy is considered a gamble (fraudulent activity), which the law does not permit.

Detailed explanation-3: -The principle of Insurable Interest or Insurable Interest is one of the fundamental principles of insurance. It is defined as the concern of an individual towards obtaining an insurance policy for an item or an individual against any type of unforeseen events such as losses or death.

Detailed explanation-4: -In the case of a life insurance policy, the owner of the policy must always have an insurable interest in the life of the insured. Also, if the owner of the policy is not the beneficiary then the beneficiary named in the contract would also need an insurable interest in the insured person.

Detailed explanation-5: -For life insurance, the insurable interest only needs to exist at the time the policy is purchased. Since a policyowner must have an insurable interest in the insured at the time the policy is purchased, individuals cannot arbitrarily take out a life insurance policy on anyone they want.