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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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