• To take out an insurance policy, the purchaser or the potential insured’s beneficiary must have an insurable interest. If a policy does not have an insurable interest as its basis, it will usu. be considered a form of wagering and thus be held unenforceable. See wager policy under INSURANCE POLICY. [Cases: Insurance 1779–1795. C.J.S. Insurance §§ 218–231, 233–252.]
insurable interest
A legal interest in another person’s life or health or in the protection of property from injury, loss, destruction, or pecuniary damage.