2. CHAPTER 4 Insurable Interest
Exam Style Questions
5% OF THE EXAM

3. What is insurable interest?
A financial relationship with the subject matter of insurance
A legally recognised relationship with the subject matter of insurance
A legally recognised financial relationship with the subject matter of insurance arising out of ownership

4. What is the subject matter of the insurance?
The financial interest in the subject matter of the contract
The policy document
The premium to be paid by the insured
The property, life or liability insured

5. Which of these is impossible to insure?
Cancellation of an event caused by bad weather
Future loss of earnings
Potential theft of money by dishonest employees
Sentimental value of wedding photographs

6. Jill recently sold her 3 month old car to Jack and no longer owns, drives it or looks after it. She forgot to cancel her motor insurance and has just learned that Jack damaged the car beyond repair in a motor accident. If she makes a claim under her own motor policy what can she expect to receive?
Current cost of replacing the car with a new one
Current market value of the car
Nothing
The original purchase price of the car

7. What is the maximum amount of insurable interest that a married person has in the life of his/her spouse?
Funeral expenses only
The value of his/her financial dependency on the assured life
It is unlimited
The amount of any outstanding loans or other debts that will have to be paid off

8. When must insurable interest be present in Life Assurance contracts?
At the time of any claim
At inception only
At inception and the time of any claim
Throughout the duration of the contract

9. When must insurable interest be present in Marine Insurance contracts?
At the time of any claim
At inception only
At inception and the time of any claim
Throughout the duration of the contract

10. When must insurable interest be present in General Insurance contracts?
At the time of any claim
At inception only
At inception and the time of any claim
Throughout the duration of the contract