There has to be insurable interest in any life insurance policy and consent; a contract without a legal purpose is considered void, and cannot be enforced by any party.

There has to be insurable interest in any life insurance policy and consent; a contract without a legal purpose is considered void, and cannot be enforced by any party.

• A. Competent parties
• B. Agreement
• C. Legal purpose
• D. Implied authority

Answer: (C)

A contract must have a lawful objective. In life insurance, even with insurable interest and the insured’s consent, the agreement won’t be enforceable if its purpose is illegal or against public policy. That requirement is what makes a contract void for lack of legal purpose. Without a legal purpose, no party—the insured, the insurer, or the beneficiary—can enforce the policy because the transaction itself would be pursuing an illegitimate end. Competent parties refers to legal capacity to contract, which matters but isn’t what this statement centers on. Agreement is about mutual assent, another essential element but not the focus here. Implied authority concerns an agent’s power to act for a principal, which doesn’t address why a life policy could be void.

A contract must have a lawful objective. In life insurance, even with insurable interest and the insured’s consent, the agreement won’t be enforceable if its purpose is illegal or against public policy. That requirement is what makes a contract void for lack of legal purpose. Without a legal purpose, no party—the insured, the insurer, or the beneficiary—can enforce the policy because the transaction itself would be pursuing an illegitimate end.

Competent parties refers to legal capacity to contract, which matters but isn’t what this statement centers on. Agreement is about mutual assent, another essential element but not the focus here. Implied authority concerns an agent’s power to act for a principal, which doesn’t address why a life policy could be void.