Insurance Chap 3

A void contract is simply an agreement without legal effect

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A voidable contract, however, is an agreement which, for a reason satisfactory to the court, may be set aside by one of the parties to the contract....

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All insurance policies may be canceled at any time by

the insured only

The initial premium payment sent with an application constitutes which part of the insurance contract?

Consideration It was sent with the application so the application has not been accepted and they are considered the app still.

Carol applies for a life insurance policy and pays the initial premium. Carol has

Made an offer to the insurer

Tom has always made a practice of having his policyholders mail their premium checks directly to his home address and forwarding them on to the insurer so that he is aware of anyone missing a payment and can contact policyowners directly if that should happen. His contract does not allow this practice, but the insurer is aware of the actions and has not asked him to stop. This practice is an example of

apparent authority

Gina accepts the initial premium when she sells an insurance policy and sends it to the company with the application. Nothing in her contract mentions handling of initial premiums. This is an example of

implied authority

An insurance contract is said to be an aleatory contract because

performance depends upon an uncertain event.

Insurance policies are said to be contracts of adhesion because the insurance company drafts the wording of the contract and the insured

simply adheres to it