What two elements are necessary for a life insurance contract to have a legal purpose?

For a life insurance contract to have a legal purpose, two key elements are insurable interest and consent. Insurable interest refers to the requirement that the policyholder must have a legitimate interest in the continued life of the insured. This means that the policyholder would suffer a financial loss or hardship if the insured were to pass away. It serves to prevent contracts that are essentially bets on someone's death, which could lead to moral hazard.

Consent is equally important, as it ensures that both parties involved in the contract agree to its terms. The insured must willingly accept the terms of the policy and provide truthful information during the application process. Without valid consent, the contract could be considered void.

These two elements establish the foundation for a legally binding life insurance contract, which is essential for its enforceability. The remaining options, while relevant to different aspects of the insurance process, do not encompass the core requirements that specifically pertain to the legal purpose of the contract.