Page 18 - IC24 LEGAL ASPECTS OF LIFE ASSURANCE

Insurable interest is the legal right of the person to insure the

subject matter with which they have a legal relationship

recognised by law.

As per common law an individual has insurable interest and can

thereby affect insurance on his own life, spouse. children,

parents and his assets.

In life insurance, insurable interest needs to exist only at the

time of taking the policy. In property insurance, insurable

interest needs to exist at the time of taking the policy as well as

at the time of making the claim.

According to contract the insurable interest exists between

employer-employee, bank - mortgager, creditor-debtor,

surety-debtor, partners, company-key man.

Parents have insurable interest on the life of their children

The principle of indemnity places the affected insured in the