Personal Contract

Is between specific parties based on the personal characteristics of the insured and cannot be transferred without the insurer's consent — Insurance is a personal contract because the insurer relies on the identity and characteristics of the particular insured, such as health, habits, occupation, and loss history, in deciding whether to accept the risk and at what premium. The contract attaches to the person or the relationship, not to the property. As a result, the policy generally cannot be transferred to another party without the insurer's consent, because the new party presents a different risk than the one originally underwritten. This personal nature is one of the distinguishing characteristics of insurance contracts and explains why assignments usually require insurer approval.

National insurance concept

Is based on the continuing life and insurable interest of the person whose life is insured — Life insurance is personal in nature because it is rooted in the life and insurable interest of the person insured. The policyowner must have an insurable interest in the insured at the inception of coverage under CIC Section 10110, and the contract relates to the continued existence of that person. This personal character distinguishes life insurance from contracts that attach to property and underlies the rules on who may own coverage on whom. Ownership may be assigned in some circumstances, but the insurable interest requirement and the personal nature of the contract remain governing principles.

CA-specific example