On the other hand, life insurance policies can be freely assigned because the insured person remains the same. In fact, many people who have contracted an incurable illness have sold their life insurance policies to 3rd parties to receive money for the treatment of their illness or care. In the event of fraud, insurance contracts are unique in that they run counter to a basic rule of contract law. For most contracts, fraud can be a reason for cancelling a contract. For life insurance contracts, an insurer has only a limited period of time (usually two years from the date of issue) to contest the validity of a contract. After this period, the insurer cannot contest the policy or refuse benefits because of a material misrepresentation, obfuscation or fraud. Another element of a valid insurance contract is insurable interest. Insurable interest is part of the purpose of the legislation. This means that the person acquiring the contract (the claimant) must be exposed to a loss with the death, illness or disability of the insured person. To have an “insurable interest” in another person`s life, a person must have a reasonable expectation of benefiting from the rest of the other person`s life. A policy taken out by a person who has no insurable interest in the insured is invalid and cannot be enforced. Thus, there must be an insurable interest between the claimant and the insured. If the claimant is identical to the person to be insured, there is no doubt that there is an insurable interest.
It is assumed that individuals have an insurable interest in themselves. If a third party has caused damage covered by a policy, the insurance company may have the right to sue the third party in place of the insured. This right is called the transfer of receivables and is intended to place the burden of the loss on the party responsible for a loss. It also prevents an insured from recovering twice: once from the insurance company and once from the responsible party. Obfuscation The issue of obfuscation is also important in insurance contracts. Concealment is defined as the applicant`s failure to disclose a material fact known at the time of their insurance application. If the purpose of the obfuscation of the information is to defraud the insurer (i.e., to obtain a policy that might otherwise not be issued if the information was disclosed), the insurer may have reasons to cancel the policy. Here too, the insurer must prove obfuscation and materiality. The insurance contract or agreement is a contract in which the insurer undertakes to pay benefits to the insured or on his behalf to a third party if certain defined events occur. Subject to the “principle of fortuitousness”, the event must be uncertain.
Uncertainty can be either when the event will occur (for example, in a life insurance policy, the time of death of the insured is uncertain) or if it will occur at all (e.g.B . . .