General Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 1/5
A person applying for coverage on their own health has an insurable interest in their own life and health because:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
A person inherently has an insurable interest in their own life and health - they stand to suffer the financial and personal consequences of their own sickness or injury. This insurable interest is what makes the policy a genuine transfer of risk rather than a wager on another's misfortune. Requiring an insurable interest prevents speculative wagering contracts.
Why the other options are wrong
- B) No ownership of property is needed to insure one's own health; insurable interest arises from one's own life and wellbeing.
- C) Insuring another person requires an interest in that person's life or health; insuring oneself needs no separate stake.
- D) Premium refundability is a policy feature, not the basis of insurable interest.
Memory hook
You always have skin in the game for your own health - that's automatic insurable interest.