What defines a personal contract in insurance?

A personal contract in insurance fundamentally emphasizes the relationship between the insurance company and the individual policyholder. The defining characteristic is that the insured cannot transfer or assign the policy to another party without the insurer's consent. This aspect is crucial because the terms and conditions of the policy are based on the individual’s specific circumstances, such as health, risk level, and personal details that were evaluated during the underwriting process.

While insurance policies do cover the company's interests and can include various limitations, these points do not capture the essence of a personal contract as specifically as the inability to transfer the policy. Similarly, the notion that a policy is limited to an agent's personal assets or that all policies are transferable does not align with the defining nature of personal contracts. The inability to transfer the policy underscores the personalized nature of insurance agreements, which are tailored to the specific needs and characteristics of the policyholder.