Which of the following represents an insurable interest?

An insurable interest exists when an individual stands to suffer a financial loss or hardship in the event of the death or disability of the insured. This concept is fundamental in insurance, as it ensures that the policyholder has a legitimate interest in the life or well-being of the person being insured.

In the context of the given choices, having a relative who is dependent on you for living expenses clearly demonstrates an insurable interest. If something were to happen to that relative, the policyholder could face significant financial hardship due to the loss of financial support. This direct connection of potential financial loss aligns perfectly with the requirements for insurable interest.

Conversely, while a friend providing emotional support may be valuable on a personal level, it does not constitute a financial loss or a tangible economic interest. Similarly, a business partner who shares profits indicates a partnership, but if that partner were to pass away, the immediate financial impact may not affect the partner's ability to continue operating the business directly in terms of cash flow, which makes it less of a clear insurable interest compared to the financial dependency seen in the case of the relative.

Therefore, recognizing insurable interest requires looking at the direct financial implications involved, which is effectively illustrated by the relationship with the relative dependent