In 1806 Lord Eldon LC sitting in English House of Lords in Lucena v Craufurd (1806) 2 Bos & PNR 269 sought to define an insurable interest, and although that definition is often used, modern commentators regard it as unsatisfactory.
The law allows insurable interest on the presumption that a personal connection makes the family member more valuable alive than dead.
[7][8] Broadly speaking, without an immediate family or a relationship that is recognized by law there is no insurable interest.
A person is presumed to have an insurable interest in his or her own life,[9] preferring to be alive and in good health rather than being sick, injured or dead.
The unlimited interest extends to the life of spouses (and, since 2004, civil partners), even if there is no financial dependency.
Although many insurers will accept such policies, they could potentially be invalidated because they have not been tested in court.
In recent years, there have been moves to pass clear statutory provisions in this regard, which have not yet borne fruit.