Page 20 - Life Assurance

While most insurance contracts are written
oral agreements of insurance are very common
and the courts will enforce them. Often an oral
agreement for insurance is made and a written
notation, called a binder is issued as evidence of
the oral contract until the full written policy is
issued. If it was not for binders, it might make
difficult to prove that an oral contract ever excited.
Also, in many cases, the insurance agent lacks
authority to bind contracts orally. Therefore, oral
contracts are discouraged.

4/4/1 Parole evidence rule:

Under the parole evidence rule, the written
contract should be the entire agreement. Therefore,
oral agreements that are not expressed
accurately in the written contract are not
enforceable, and it is dangerous for the insured
to rely on them.

4/4/2 Effect of mistakes:

If an honest mistake is made in written in an
insurance contract. It can be reformed, if there is
a proof of mutual mistake, or a mistake on one side
that is known to be a mistake by the other party,

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