What does it mean when an insurance contract has a 'legal purpose'?

When an insurance contract has a 'legal purpose,' it signifies that the contract cannot involve any illegal activities or immoral purposes. This principle is essential in the realm of insurance because for a contract to be enforceable in a court of law, the activities it covers must align with the legal framework of society. For example, any insurance covering theft, fraud, or other unlawful acts would be considered void, as the intent and underwriting must align with lawful behavior. Therefore, the contract must operate under the premise that it supports actions and events that are permitted by law, ensuring its validity and sustainability within the legal system.