Insurable interest can be proven by which of the following?

• A. Economic loss only
• B. Love and affection or economic loss
• C. Ownership alone
• D. Public policy considerations

Answer: (B)

Insurable interest means the policyholder would suffer a real loss if the insured event occurs, so there must be a true stake in the insured person or property. This can come from an economic stake—where a financial loss would occur if the insured event happens—and from close personal ties, where love and affection create a legitimate reason to insure someone (for example, a spouse, parent, or close family member). That combination covers both the financial and relational bases for insurable interest, which is why “love and affection or economic loss” is the best answer. Ownership alone isn’t enough in every case to prove insurable interest (it can matter in some scenarios, like lenders). Public policy considerations aren’t the basis for proving insurable interest; they’re more about preventing wagering, not establishing the stake itself.