Insurable interest means having a legally recognised relationship to the insured person or property such that the insured event would cause a relevant loss or disadvantage. It helps distinguish insurance from a wager. When the interest must exist depends on the type of insurance and the applicable legal framework.
A homeowner in Nepal has an obvious interest in their house, while a lender may have an interest connected to an outstanding loan. Life insurance relationships require their own assessment. The insurer should be told about ownership, lending, or other interests so the insurance policy reflects the actual arrangement.