An insurable interest exists in which of the following situations?

An insurable interest is a fundamental principle in insurance that ensures a person taking out a policy has a legitimate financial interest in the preservation of the subject matter of the insurance. This means that the policyholder stands to suffer a financial loss if the insured event occurs.

The correct choice highlights that insurable interest exists when a person has an economic interest. This can encompass a variety of relationships beyond just familial or romantic connections. For example, a business partner may have an insurable interest in the life or health of the other partner, as the financial health of the business could be affected by that partner's loss. Similarly, a creditor might have an insurable interest in the life of a debtor, ensuring that the debtor’s death does not jeopardize the loan repayment.

The broader definition of insurable interest means that the spouse or family relationship is not the only scenario where it is applicable. Instead, it recognizes any situation where a financial interest is established, offering a much wider applicability in insurance contracts.