Question

What is the concept of insurable interest in life insurance?

a.

The beneficiary must have a financial interest in the continued existence of the insured

b.

The sum assured must not exceed the quantified value of the financial need

c.

Both a and b

d.

None of the above

Posted under IC22 Life Insurance Underwriting

Answer: (c).Both a and b Explanation:Insurable interest means that the beneficiary under the policy should have a financial interest in the continued existence of the insured and would suffer significant financial loss in the event of death of the insured. Also, the sum assured must not exceed the quantified value of that financial need.

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Q. What is the concept of insurable interest in life insurance?
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