Define the Term "Insurable Interest" and State the Effect on the Insured

question 35

Essay

Define the term "insurable interest" and state the effect on the insured where he or she does not have an insurable interest.

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Definitions:

Lottery

A form of gambling that involves the drawing of numbers at random for a prize, often analyzed for its economic impact and decision-making under uncertainty.

Probability

A measure of the likelihood that an event will occur, ranging from 0 (impossibility) to 1 (certainty).

Expected Utility Function

A concept in economics that represents an individual's preference for certain outcomes over others, calculated as a weighted average of the utility of all possible outcomes, based on their probabilities.

Utility Function

In economics, a mathematical representation that ranks individuals' preferences over sets of goods and services, indicating the level of satisfaction or utility they obtain.