When third-party ownership is involved, applicants who are also the stated primary beneficiary are required to have what?

When third-party ownership is involved, it is essential for applicants who are also the stated primary beneficiary to have an insurable interest in the proposed insured. Insurable interest refers to the legal and financial interest that the beneficiary must have in the life of the insured to ensure the legitimacy of the insurance contract.

The requirement for insurable interest is rooted in the principle that a person should only purchase insurance on the life of another if they would suffer a financial loss if that person were to pass away. This ensures that insurance remains a protective tool rather than encouraging gambling on lives. Therefore, if the applicant is also the primary beneficiary, having insurable interest ensures that the beneficiary stands to incur a loss due to the insured's death, thus validating the insurance policy.

Other options like disability or health insurance, and proof of income do not relate directly to the basic principle of insurable interest required in third-party ownership scenarios. They focus on other aspects of insurance that do not address the core need for a valid interest in the life of the insured when someone else is applying for the policy.