General Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 1/5
A health insurance contract entered into with a minor who lacks contractual capacity is generally:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Contractual capacity requires the parties to be legally competent, and minors generally lack full capacity to enter binding contracts. A contract with a minor is typically voidable — the minor may choose to disaffirm it, while the adult party is generally bound unless the minor avoids it. This is why policies on minors are usually purchased and owned by adults. Capacity is one of the four essential elements of a valid contract, judged at formation.
Why the other options are wrong
- B) Paying the premium does not cure a capacity defect; minors' contracts remain voidable despite payment.
- C) The voidability protects the minor; the insurer does not have the unilateral right to void the contract on capacity grounds.
- D) The dollar amount of the premium does not affect the capacity rule; even modest contracts with minors are voidable.
Memory hook
Minor = the escape hatch belongs to the minor. Capacity is checked at the door of the contract.