What potential concern arises if the applicant for a life insurance policy and the person to be insured are two different individuals?

When the applicant for a life insurance policy is not the same person as the one being insured, a key concern is whether there is insurable interest between the two parties. Insurable interest is a fundamental principle in insurance that requires the applicant to have a legitimate interest in the continued life of the insured. This is often present in relationships like those between family members, spouses, or business partners.

If insurable interest does not exist, the policy could be deemed a wager on the life of the insured, which is generally prohibited. This is important as it helps to prevent insurance fraud and ensures that the applicant has a tangible reason for wanting the insurance policy, as they would suffer a loss if the insured individual were to pass away.

While the other options may pertain to aspects of the insurance process, they do not address the critical issue of insurable interest. Thus, the presence or absence of insurable interest is the primary concern that arises when the applicant and the insured are different individuals.