What is insurable interest in life insurance?

Insurable interest refers to when someone (called Person A) wants to buy life insurance on another person (Person B). In order for Person A to buy life insurance on Person B, there must be an emotional and financial loss to Person A if Person B dies. You can't buy life insurance on some random person.

Insurable interest does not apply to beneficiaries. You can name anyone as beneficiaries, whether they are related to you or not.

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