What is an Insurable Interest?

Insurable interest…. What is it and how does it affect you… if at all? In order for you to purchase insurance, you have to face some sort of risk of either losing money or something of value.

In the case of life insurance, your risk is losing someone of value which would in turn lead to a financial loss for you.

In order to purchase life insurance, this interest is something that has to exist at the time you fill out the application.

Check out the top tips on how to buy life insurance.

Once you have completed the application and it’s been approved and issued, your insurer must pay the death benefit, even if this “interest” no longer exists.

In other words it must only exist at the time the application is approved and issued.

The following are scenarios where interest exists

• You are insuring your own life, read up on the top reasons to buy life insurance.



• You are insuring a family member or spouse


• You are insuring an employee vital to your business, somebody who has a financial obligation to you or owes you a debt or you are insuring a business partner.

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