Who qualifies as "insurable interests" in life insurance?

In life insurance, "insurable interest" refers to a financial or emotional stake in the continued life of the insured. Entities or individuals that would have a financial loss from the insured's death qualify as having an insurable interest because they stand to suffer a tangible detriment if the insured were to pass away.

For example, a spouse may have insurable interest in the life of their partner because the death of the partner could result in not only emotional loss but also significant financial burden, such as loss of income or shared responsibilities. Similarly, a business partner would have an insurable interest in the partnership if the death of one partner could lead to financial loss for the surviving partner due to the loss of the business.

The concept of insurable interest is essential in preventing moral hazard, as it helps ensure that life insurance is purchased for valid reasons—such as protection against financial loss—rather than for speculative gain or wagering on someone's death.