In life insurance policies, an insurable interest is not required between which two parties?

The concept of insurable interest is essential in the realm of life insurance, as it ensures that the policyholder has a legitimate interest in the continued life of the insured. This requirement protects against moral hazard that might arise if individuals could purchase insurance on lives in which they have no vested interest.

In the case where the policy owner and the beneficiary are involved, an insurable interest is not required. This means that the beneficiary can be someone who does not have a direct financial interest in the life of the insured. For example, in many life insurance policies, the insured can name a spouse, child, or even a friend as the beneficiary, even if there is no financial stake or insurable interest present. This allows for flexibility in naming beneficiaries who may not necessarily be financially affected by the insured's death.

Understanding this dynamic is crucial because it highlights how life insurance can serve both as a financial instrument and a means of providing support to loved ones or other parties of choice. In contrast, the other party combinations involve relationships where insurable interest is typically required. For instance, the insured must have an interest in their own life, and policy owners generally must have interest in the insured's life to prevent exploitation.