Insurers generally reject applications for coverage if the beneficiary does not have an insurable interest, out of concern for moral hazard.

Question

Quizplus · Accepted Answer

Insurable interest is a fundamental requirement in insurance policies to ensure that the person purchasing the policy has a legitimate interest in the welfare of the person being insured, thereby reducing the risk of moral hazard where the policyholder might benefit from the loss of the insured.

Insurers Generally Reject Applications for Coverage If the Beneficiary Does