A life insurance policy has a legal purpose if which of the following elements exist?

A life insurance policy is considered to have a legal purpose when both insurable interest and consent are present. Insurable interest means that the policyowner must have a legitimate interest in the continued life of the insured, which is essential for the policy to be valid. This requirement ensures that the policy is not merely a gambling contract but rather a reflection of a genuine interest in the person being insured. Consent indicates that the insured party must agree to the issuance of the policy, acknowledging the coverage and its implications.

Without these two elements, the policy could be deemed invalid or unenforceable. For instance, if a person takes out a life insurance policy on someone with whom they have no relationship or financial interest, it can be seen as an unethical practice. Additionally, if a person is not aware that they are being insured, the policy lacks the necessary consent and could face legal challenges. Therefore, both insurable interest and consent are critical for a life insurance policy to have a legal purpose.