Insurable Interest (Noun)
Meaning
An interest in a person or thing that will support the issuance of an insurance policy; an interest in the survival of the insured or in the preservation of the thing that is insured.
Classification
Nouns denoting possession and transfer of possession.
Examples
- To establish an insurable interest in her mother's life, Emily must be able to show that her mother's death would result in a financial loss for her.
- Businesses can take out policies to insure their buildings, stock, and other property if they can prove they have an insurable interest in those items.
- It was a coldblooded plot, buying an insurable interest in someone's life with the intent to benefit from their untimely death.
- At a minimum, lenders usually require a homeowner to obtain mortgage insurance with the lender holding an insurable interest as long as they retain ownership in the loan.
- A business partner who has an insurable interest in the life of their partner may be issued a life insurance policy on that partner's life.