In life insurance, insurable interest must exist:

In life insurance, insurable interest is a fundamental requirement that ensures the policyholder has a legitimate stake in the life of the insured person. This concept is particularly important because it helps prevent insurance from becoming a vehicle for gambling on someone's life.

The correct answer indicates that insurable interest must exist at the time of application. This means that when a person applies for a life insurance policy, they must demonstrate that they have a valid interest in the continued life of the insured. Typically, this requirement is fulfilled by showing a relationship such as that of a spouse, parent, child, or business partner, where a potential loss would have a financial impact on the policyholder.

If insurable interest is not present at the time of application, the policy may be considered void or, at the very least, may not be enforceable. This ensures that life insurance maintains its purpose as a protective financial instrument rather than a speculative investment.

Other options do not accurately reflect the requirement of insurable interest in life insurance. The idea that it is necessary only at the time of claim would allow individuals to benefit from policies without a legitimate connection to the insured, which the legal framework aims to prevent. Similarly, saying it is necessary only when the policy is issued overlooks the critical