Chp2 Legal Concepts and Contracts

Which of the following terms best describes the applicant's statements on an insurance application?

Representations

Joyce applies for a health insurance policy. When the agent delivers the policy to Joyce, an additional premium is required to account for Joyce's medical conditions. Joyce must agree to pay the additional premium before the policy is effective. The insurer has made:

A counter-offer

Insurance contracts sometimes contain ambiguities. Which of the following has not been taken to court for further interpretation?

Subrogation

All of the following are part of the consideration element of an insurance contract, EXCEPT:

The applicant's promises

In order to be valid, a contract must have:

Legal purpose

What are the basic elements of a legal contract

Offer, acceptance, consideration, competent parties and legal purpose

Insurable interest requires that an individual have a valid concern for the well being of the person insured. In a life policy insurable interest can be present in all of the following, EXCEPT:

Second cousins

All parties to a contract must be of a legal age, mentally capable of understanding the terms of the contract, and not influenced by drugs or alcohol. Which of the following elements of a legal contract is described?

Competent parties

What type contract is said to be, if...then?

Conditional

All of the following statements are true regarding warranties, EXCEPT:

Insureds are held to the principle of warranties.