Question
In cases where a life insurance policy owner is not the same person as the insured, insurance companies often require that such purchases be for
In cases where a life insurance policy owner is not the same person as the insured,
insurance companies often require that such purchases be for those with an "insurable
interest". For life insurance policies, close family members and business partners will
usually be found to meet this test. In this case the purchaser is demonstrating that they
would suffer an economic loss if the insured were to die. What economic argument could be
made for why insurance companies would make such a restriction when it seems there
might be a market for life insurance to people who wish to ensure others for whom there is
not such "insurable interest"?
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