An insurance contract consists of two components:

1. policy application
   • doesn't need to be attached but often is
   • the policy prevails over the application
2. the policy contract, including
   • attachments at issue
     • e.g., riders
   • amendments after issue
     • e.g., additional riders

Policy illustrations are not part of the insurance contract. In case of discrepancies, the policy contract takes precedence over the policy application.

There are requirements for a valid insurance contract. There is contractual protection for you as the policyowner.

The Parties

There are two legal parties to an insurance contract

1. the insurer
   • provides the contract of insurance
2. the insured (the policyowner)
   • the party protected
   • makes the contract with the insurer

The beneficiary is not a party and neither is the life insured (unless also the policyowner).

Contract Flaws

Flaws may make the insurance contract void or voidable.

Void (Fatal Flaw)

A void contract is invalid from the outset and cannot be corrected. For example, the client commits fraud.

Voidable

A voidable contract can be voided by either party or corrected. The contract remains valid until rescinded or made void ("avoided"). For example

• misrepresentation
• lack of insurable interest

Premiums may not be returned.