What does the term "insurable interest" mean in Georgia life insurance law?

The term "insurable interest" refers to a requirement in life insurance policies that mandates the policyholder to have a legitimate reason to insure the life of the individual covered by the policy. In the context of Georgia life insurance law, this means that the policyholder has a financial or emotional stake in the life of the insured.

Having an insurable interest is crucial because it prevents moral hazards and ensures that the policyholder has a vested interest in the continued wellbeing of the insured. This concept protects both the insurance company and society from unethical practices, such as purchasing life insurance on someone with whom the buyer has no connection.

The other options do not accurately represent the concept of insurable interest. While family members often have insurable interest, it is not limited to them; business partners, creditors, and other relationships can also establish insurable interest. The minimum age for purchasing insurance and the broader capability for individuals to be beneficiaries are separate considerations and do not define insurable interest itself.