A pharmaceutical company employs a young chemist who is responsible for three new patents last year and for the development of the company's two best-selling drugs.The company purchased a large life insurance policy on the chemist.In this case,the insurable interest requirement was met because of a(n)

Question

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The insurable interest requirement is met when the policy owner would suffer a financial loss if the insured were to die. In this case, the company would incur a financial loss if the chemist were to die because of the value of the patents and drugs he has developed. This is a pecuniary interest, a financial interest, which satisfies the insurable interest requirement.

A Pharmaceutical Company Employs a Young Chemist Who Is Responsible