Definition - What does Legal Consideration mean?
Legal consideration refers to the exchange of two or more things of value in a legally binding contract. Usually, money is exchanged for some type of goods or services in a contract. In the context of insurance, legal consideration usually involves an insurance company providing an insurance policy in exchange for money from the policyholder.
Insuranceopedia explains Legal Consideration
In order for a contract to be valid, it must have consideration. Some things can void consideration. For example, if a minor signs an insurance contract, the contract would not have consideration because minors are not legally allowed to enter into contractual agreements by themselves.
The exact legal considerations in every insurance contract can vary. It is up to the policyholder and the insurer to determine which legal considerations work for them.
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