What distinguishes insurable interest from ethical interest?

Insurable interest is fundamentally a legal requirement that exists in insurance contracts to ensure that the insured party has a legitimate stake in the preservation or continued existence of the insured subject. This requirement serves to prevent insurance fraud and ensures that insurance is used as a risk management tool rather than a speculative venture. For example, when someone takes out a life insurance policy on a person, that individual must have a vested interest in that person's life, such as being a family member or a business partner.

On the other hand, ethical interest is more subjective and pertains to personal beliefs or moral considerations, which might not be enforceable by law. It could involve considerations about why an individual might want to insure someone or the ethical implications of benefiting from another’s loss.

The distinction lies in the nature of their application within insurance: insurable interest must be present for the policy to be valid and enforceable, while ethical interest is based on individual values and is not a required component of the insurance agreement.