[Solved] What does the term 'Insurable Interest' mean in life insurance? — Ans: The insured must have a financial interest in the life insured at policy... | Insurance Awareness

Insurance Awareness - Life Insurance - LIC

What does the term 'Insurable Interest' mean in life insurance?

AThe insurer has the right to cancel the policy anytime

BThe insured must have a financial interest in the life insured at policy inception

CThe policyholder can transfer the policy to anyone

DThe nominee receives the sum assured after maturity

Step-by-Step Solution

Step 1: Understand Insurable Interest
Insurable Interest means the insured must have a financial or emotional stake in the life insured at the time the policy is taken.
Final Answer:
The insured must have a financial interest in the life insured at policy inception → Option B
Quick Check:
Insured must have = correct answer ✅

Quick Trick: Remember: Insurable Interest must exist at policy start.

Common Mistakes:

MISTAKES

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