Completing the Application, Underwriting, Delivering Policies, Contract Law
Why does the law require a life insurance contract to have a legal purpose?
Answer and explanation
Answer: C. Legal purpose requires insurable interest and lawful consideration. Without it the contract would be a wager on a human life, which public policy refuses to enforce.Source: NAIC Life Insurance Buyer's Guide — The policy as a contract: legal purpose and insurable interest
More completing the application, underwriting, delivering policies, contract law questions
- Which individual would be deemed legally INCOMPETENT to enter into a binding life insurance contract?
- Which of the following facts most directly establishes an individual's legal capacity to enter into a life insurance contract?
- Which statement best explains why a life insurance policy is legally considered a conditional contract?
- Which statement correctly separates the aleatory character of a life policy from its conditional character?
- Who must sign a life insurance application when an adult purchases insurance on their own life?
- Why is a life insurance contract void if issued to a policyowner who has no insurable interest in the insured?
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