Page 10 - Life Assurance

It is not always obvious whether or not a
contract is an insurance contract or whether the
issuing party is an insurance company. Certainly
the following factors are not the controlling ones
in making such a determination: whether or not
the term "insurance" appears in the contract or
company name; a statement that the contract is
not to be considered insurance; and the term or
mode of payment. Rather, the courts look to the
true nature of the promise or acts to be
performed and the circumstances under which
they will be performed.

Among the legal tests that have been used
to determine whether or not a given transaction
constitutes legally, enforceable insurance are
the following:

1- there must be an insurable interest by the
party seeking insurance.

2- the agreement of insurance must conform
to the legal requirements of a contract offer and
acceptance, consideration, legal purpose, and
capacity of parties. The agreement can include
transactions, which in substance are contracts
although legally they may not be so. Thus in New
York a conditional sale of merchandise involving the
cancellation of the debt upon death has been held to
constitute a contract of insurance.

74 Life41/life/life 08