Primerica Life Insurance Practice Exam

An individual must demonstrate insurable interest in a policyholder to ensure that they are financially or emotionally affected by the insured's death or disability. This principle protects insurance from being a means for speculative gambling on life or health outcomes.

When considering the examples given, the relationship between a debtor and a creditor is generally not considered to represent direct insurable interest in the same way as the other options. For instance, while creditors may be financially impacted by a debtor's death (as it might affect repayment of a loan), they do not have a direct emotional bond or personal reliance on the debtor's life in the same manner as a parent to their child or business partners to one another.

Conversely, the other options represent strong insurable interests: a parent has a natural, vested interest in their child's well-being, business partners have mutual interests dependent upon one another’s continued ability to contribute to the business, and an employer has a stake in the wellbeing of their employee as they contribute to the operational success of the organization.