Which of the following family relationships is generally not considered to create an insurable interest?

• A. Parent and child
• B. Aunt-nephew
• C. Spouse
• D. Sibling

Answer: (B)

Insurable interest means the policy owner would suffer a financial loss if the insured dies, which is why certain close family ties are automatically recognized as creating that interest. Spouse, parent and child, and even siblings are typically considered to have an interpersonal or financial connection strong enough to support a policy. An aunt-nephew relationship, on the other hand, does not inherently involve a financial or dependent link that would suffer a loss if the nephew or aunt died. Without an additional basis—such as a contract, financial dependency, or other insurable interest—the aunt-nephew relationship generally does not create insurable interest. That’s why this relationship is typically not considered to create insurable interest.