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Chapter 1 - Chart E,F General Insurance Principals
E. The Law of Large Numbers
The law of large numbers says what will happen to a large group of similar exposures (people) is very predictable!
What is the chance of a loss?
F. Insurable Interest
An individual has an insurable interest in some person or object when the death or injury of the person or damage or destruction of the object results
in financial loss to the individual.
In property and casualty insurance, the insurable interest must be present at the time of the loss.
With life insurance, the insurable interest must exist at the inception of the policy, but not necessarily at the time of loss.
Individuals have an unlimited insurable interest in themselves; naming your estate as beneficiary.
An individual (or organization) has an insurable interest in the life of another individual if the death of the latter brings financial loss to the former or creates an adverse impact on the former by virtue of their relationship (spouse, child, etc.)
Chapter 1 - Chart E,F