All insurance contracts are governed by the concept of offer and acceptance. This requires you to fill the proposal form and send it to the insurance company. Sometimes you are also required to attach a check for the premium amount, with the proposal form.
Your filling the proposal form and sending it to the insurance company is the offer and when the insurance company accepts your proposal it is the acceptance part of the concept. The amount you pay as premium is considered as the consideration part of the contract. The concept of legal capacity also applies to insurance contracts. It requires both the parties to be legally capable of entering a contract. Your insurance contract is based on legal purpose, which means that the contact is not meant for encouraging illegal activities. The other legal principles that govern the contracts are:
Principle of Indemnity:
This principle requires the insurer to pay an amount, not more than the actual loss suffered, in case of loss. The amount paid as claim by the insurance company should not be more than the sum assured in the insurance contract. The aim is to provide a claim amount that will help the claimant to...
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