Page 13 - IC23 life insurance application

Like any other contract, life insurance contract is enforceable in a court of law.

The terms and conditions of the contract are mentioned in the policy, which must

be read carefully. The essential elements of a contract are :

1. the parties to the contract should be major,

2. there should be an offer and acceptance,

3. consideration should be paid for a reciprocal benefit,

4. parties to the contract must be of one mind

5. the object of the contract should be legal.

We will illustrate the above points as they apply to the life insurance in order to

understand clearly the contractual nature of life insurance.

It is well-known that the proposer of life insurance has to be a major to enter into a

valid legal contract. However where the insured person is a child, his father or

mother can propose for the insurance of the child, as the parents are accepted as

legal guardians and authorised to enter into legal contract on behalf of their ward.

The proposal form constitutes an offer letter by the proposer, wherein the proposer

is expected to answer all questions truthfully and should not withhold any information

regarding his health, habit and occupation. Under normal contract of purchase or

sale of commodities, land etc, the buyer has the obligation to examine the quantity

and the quality of the object that he is buying. ‘Buyer beware’ or caveat emptor is

the principle, because the buyer has no right to come at a later date and ask for the

termination of the contract on the ground of deficiency in quality or quantity. It is true

that in the present age, when the commodities like TV, Refrigerator or Computer are

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