xcel chapter 3

Ambiguities in an insurance policy are always resolved in favor of the

insured

The authority granted to a licensed producer is provided via the

law of agency

What makes an insurance policy a unilateral contract?

only the insurer is legally bound

According to the principle of Utmost Good Faith, the insured will answer questions on the application to the best of their knowledge and pay the required premium, while the insurer will deal fairly with the insured and it's

promises made

In an insurance contract, the insurer is the only party legally obligated to perform. Because of this, an insurance contract is considered

unilateral

Which of the following is an example of the insured's consideration?

A paid premium

What is implied authority defined as?

Authority that is not specifically given to an agent in the agency contract, but that an agent can reasonably assume to carry out his/her duties

Insurable interest does NOT occur in which of the following relationships?

business ower and business client

What are an applicant's statements concerning occupation, hobbies, and personal health history regarded as?

representation

Under a contract of adhesion,

the terms must be accepted or rejected in full

Legal purpose is a term used in contract law meaning

there must be legal reasons for entering into the contract

Bob and Tom start a business. Since each partner contributes an important element to the success of the business, they decide to take life insurance policies out on each other, and name each other as beneficiaries. Eventually, they retire and dissolve the business. Bob dies 12 months later. The policies continue in force with no change. Both partners are still married at the time of Bob's death. In this situation, who will receive Bob's policy proceeds?

tom

In an insurance contract, the element that shows each party is giving something of value is called

consideration

Which type of clause describes the following statement: "We have issued the policy in consideration of the representations in your applications and payment of the first-term premium".

consideration clause

In order for a contract to be valid, it must

contain offer and acceptance

______ is NOT an element of a valid contract.

countersignature

The deeds and actions of a producer indicate what kind of authority?

implied

The power given to an individual producer that is not specifically addressed in his/her contract is considered what type of authority?

implied

All of the following are elements of an insurance policy EXCEPT

claim forms

A professional liability for which producers can be sued for mistakes of putting a policy into effect is called

errors and omissions

When the principal gives the agent authority in writing, it's referred to as

express authority

Which contract element is insurable interest a component of?

legal purpose