Under what condition would a life insurance policy be void due to illegality?

A life insurance policy would be void due to illegality primarily when there is no insurable interest at inception. Insurable interest refers to a legitimate interest in the continued life of the insured; it is a foundational principle in insurance law that prevents insurance from being used as a form of gambling.

For a life insurance contract to be valid and enforceable, the policyholder must have a direct interest in the life of the insured at the time the policy is taken out. This means that the policyholder would suffer a financial loss or hardship upon the death of the insured. If such an interest is lacking, the contract is considered illegal and therefore void. Without insurable interest, the contract does not adhere to the lawful purpose of insurance, which is to provide protection against loss, rather than to create a speculative opportunity.

In contrast, while factors such as the insured party being underage, unpaid premiums, or misrepresented health can create issues in the enforceability of a policy, they do not strictly render the policy void due to illegality. These issues may lead to different consequences, like claim denial or the potential for contractual penalties, but they do not violate the fundamental legal principles that underpin the contract itself in the same way that the absence of insurable