Which of the following does not have a legitimate insurable interest?

Insurable interest is a fundamental principle in insurance that requires the policyholder to have a legitimate interest in the life or property being insured. This is designed to prevent insurance contracts from being used for gambling purposes or speculative investments.

In the case of an individual insuring the life of a mistress, this relationship typically does not constitute a legitimate insurable interest. Insurable interest should be based on a recognized relationship that suggests a financial necessity to protect oneself from loss, which is generally recognized in more formal relationships such as familial ties or business partnerships. A mistress relationship lacks the legal recognition and social responsibility that other relationships, such as those between spouses, parents, or business partners, possess.

On the other hand, parents typically have a legitimate insurable interest in the lives of their children, stemming from the responsibility and care they provide. A spouse also has a recognized insurable interest in their partner, given the emotional and financial ties of marriage. Furthermore, business partners have a vested interest in each other's lives since the death of one partner could substantially affect the business operations and their financial stability. These relationships illustrate clear and recognized risks, affirming the legitimacy of insurable interest.