When Is Insurable Interest In Life Insurance Necessary? 
There is not a time when an insurable interest is not necessary . The insurable interest is the reason that a life insurance contract is written . Without insurable interest all other underwriting factors are irrelevant . The sole purpose of life insurance is to protect another person or entity from a financial loss at a person 's death . Whether it is a loved one who would suffer financially due to loss of income or debt . A loan institution that would suffer loss of a debt repayment at a person 's death . A business owner with the death of a partner , buy sell life insurance , or a death of a key employee , key man life insurance . There always has to be an insurable interest to purchase life insurance . 