The correct answer is: C. Both A & B
Insurable interest is a legal concept that requires an insured person to have a financial interest in the subject of the insurance policy in order to be able to make a claim. This interest must exist at the time the policy is taken out and must continue to exist until the claim is made.
There are two main types of insurable interest: pecuniary interest and moral interest. Pecuniary interest is a financial interest in the subject of the insurance policy. For example, if you own a car, you have a pecuniary interest in it and would be able to take out insurance on it. Moral interest is a non-financial interest in the subject of the insurance policy. For example, if you are the parent of a child, you have a moral interest in their well-being and would be able to take out insurance on their life.
In order to be valid, an insurance contract must meet certain requirements, including the requirement that the insured person has insurable interest in the subject of the insurance. This requirement is designed to prevent people from taking out insurance policies on things that they do not have a financial or moral interest in, such as the lives of strangers.
If an insured person does not have insurable interest in the subject of the insurance policy, then the policy may be considered void and the insurer may not be liable to pay out any claims.
Here are some additional details about each option:
- Option A: At the time of taking policy. This is the most common requirement for insurable interest. The insured person must have an insurable interest in the subject of the insurance policy at the time the policy is taken out.
- Option B: At the time of claim. In some cases, insurable interest may also be required at the time of claim. This is usually the case for life insurance policies. For example, if you take out a life insurance policy on your spouse, you will need to have insurable interest in their life at the time the policy is taken out and at the time you make a claim.
- Option C: Both A & B. This is the correct answer. Insurable interest must be present in a general insurance contract at both the time of taking policy and the time of claim.
- Option D: None of the above. This is an incorrect answer. Insurable interest is a legal requirement for general insurance contracts.