Chapter 3 Legal Concepts of Insurance of the Insurance Contract
Which of the following BEST describes a conditional insurance contract?
A contract that requires certain conditions or acts by the insured individual This means that the insurer's promise to pay benefits depends on the occurrence of an event covered by the contract.
Which of the following is an example of the insured's consideration?
A paid premium
According to life insurance contract law, insurable interest exists
at the time of application
Ambiguities in an insurance policy are always resolved in favor of the
insured
What are an applicant's statements concerning occupation, hobbies, and personal health history regarded as?
representation
In a life or health insurance contract, "consideration" would be the
statements made in the application and the premium
Legal purpose is a term used in contract law meaning
there must be legal reasons for entering into the contract
In an insurance contract, the insurer is the only party legally obligated to perform. Because of this, an insurance contract is considered
unilateral
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
Who is responsible for assembling the policy forms for insureds?
Insurance carriers
The authority granted to a licensed producer is provided via the
Law of Agency According to the Law of Agency, the producer/agent represents the principal/insurer and is granted actual, implied and apparent authority to act on behalf of the insurer. The Law of Agency makes the principal responsible for these acts of the agent.
Intentional withholding of material facts that would affect an insurance policy's validity is called a(n)
concealment
In an insurance contract, the element that shows each party is giving something of value is called
consideration
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