Ted,one of the partners in a two-man consulting partnership with Sam,is told by his insurance company that he does not have an insurable interest on the life of his partner,Sam.Generally,the insurance company is correct to deny Ted.

Insurable Interest

A stake in the value of an entity or event for which an insurance policy is purchased to mitigate risk of loss.

Consulting Partnership

A business arrangement where two or more individuals or entities collaborate to offer consulting services, pooling expertise and resources.

Insurance Company

A company that offers financial protection to individuals and entities against potential losses or damages in exchange for payment of premiums.