New York Insurance Exam Practice Question
Which of the following is a requirement for an insurable interest?
Correct Answer: B
Rationale: An insurable interest exists when the applicant has a legitimate stake in the insured's life, which can be financial or emotional. This requirement ensures that the applicant would suffer a loss from the insured's death, thus preventing insurance from being a mere gambling tool.
Option A is incorrect because while a benefit from the insured's death is important, it is not the sole criterion; emotional stakes also qualify as insurable interest. Option C is misleading; while familial relationships can indicate insurable interest, they are not mandatory. Option D is incorrect, as the applicant does not need to be the insured themselves; they simply need a valid interest in the insured's well-being.
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