To be enforceable, a contract must be entered into by competent parties. With a contract of insurance, the parties to the contract are the applicant and the insurer. The insurer is considered competent if the entity has been licensed or authorized by the state where it conducts its business. The applicant, unless proven otherwise, is presumed to be competent, with three possible exceptions: minors; the mentally infirm; and those under the influence of alcohol or narcotics.
Each state has its own laws governing the legality of minors and the mentally infirm entering into contracts of insurance. These laws are based on the principle that some parties are not capable of understanding the contract they agree to. It should be noted that beneficiaries and insureds — if different from the applicant — are not parties to an insurance contract. As such, they do not have to have contractual capability. Other competent parties that may enter into contracts of insurance with an insurance company include business entities, trusts and estates.
In eternal life insurance, all applicants are presumed and proved to be incompetent. As mentioned earlier, humanity is fallen. People may have “free will,” but those who are blinded by sin and are in bondage to their own flesh can, in that state, choose only to persist in sin (Romans 3:9-20). Because of the neotic effect of sin, that is, sin’s corruption of our minds, we are unable with our own cognitive or intellectual resources to incline ourselves toward God (Romans 1:21, I Corinthians 2:14). Volitional creatures have the capacity to choose only that which is consistent with their desires, at the moment. Where sin and death reign, “free will” is a misnomer.
We all are “dead in sin” until we are “made alive” by God, in God, for God (Ephesians 2:4-5). People whose disposition is spiritual death have neither the desire to enter into covenant with God, nor do they have even a modicum of competence to uphold their end of any such covenant (Romans 8:7-9). This is why God, upon reviving human beings and empowering us with the Holy Spirit, both commands and enables people to remain in covenant with him (Genesis 17:1-9, Deuteronomy 32:4, Judges 2:1-5, Psalm 78:32-39, Hebrews 13:20-21, Jude 24-25). In the Lord’s effectual calling, he changes our desires so that we can choose life in him.
Christ, as mediator for his people, fulfilled the law when we could not, and steps in as the “competent party” to pay that which is due in God’s covenant to redeem his people (Psalm 49:7-9, Romans 8:3, Galatians 3:10-12, 19-24, Ephesians 5:2, Hebrews 9:11-14). As beneficiaries, we receive the eternal benefits, as well as the temporal benefits of this supernatural synergy.
We are incompetent, of ourselves, to remain faithful to God the Father — which is why the Son is faithful to the Father on our behalf, and thus the Father is faithful to his children.