Question

Explain insurable interest and give an example

Answer 1

The examples of insurable interest is an employer under certain arrangements.

Insurable interest is a investment that protects anything subject to a financial loss. A person or entity has an insurable interest in an item, event, or action when the damage or loss of the object would cause a financial loss or other hardshapes. In order to have an insurable interest a person or entity would take out an insurance policy protecting the person,item, or event in question. The insurance policy is able to  mitigate the risk of loss if something happens to the asset-like becoming damaged or lost.

Examples of insurable interest are:

• Yourself
• Your spouse or former spouse
• Your children or grandchildren
• A special needs adult child
• An aging parent
• An employer (under arrangements)

Hence the examples of insurable interest is an employer under certain arrangements.

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