FSI Credit Insurance Practice Test 2026 – Complete Exam Prep

Insurable interest is the financial stake someone has in the continued life of another person. In life insurance, an individual generally has this interest in their own life because their death would directly impact them financially—loss of income, increased final expenses, and any debts or obligations that must be settled. Since the policyowner and the insured are typically the same person, insurable interest is assumed for one’s own life, so no separate proof is usually needed at issue. This is why the statement is true. When insuring someone else, you’d generally need to show a legitimate insurable interest, such as being a spouse, parent, or business partner.