Who can hold an insurable interest in a life insurance policy?

An insurable interest in a life insurance policy refers to the legal and moral interest that a person has in the life of another person, which ensures that the policyholder would suffer a financial loss or hardship if the insured individual were to die. The concept of insurable interest is crucial in establishing the legitimacy of an insurance contract.

The correct choice indicates that anyone related by blood or marriage can hold an insurable interest. This is rooted in shared familial ties or relationships, where the death of an individual could impose a financial burden on their relatives. These relationships naturally create a vested interest in the well-being of the individual, allowing family members to take out life insurance on one another without violating the principle of insurable interest.

In contrast, the other options restrict the ability to hold insurable interest unnecessarily. Claiming only the policy owner or only professional financial advisors can hold insurable interest does not reflect the broader understanding that family ties inherently provide this interest. Moreover, stating that any individual who can make financial decisions holds insurable interest may not be accurate, as the critical aspect of insurable interest is inherently tied to relationships rather than just financial authority.