Insurance 3

An agent whose actions exceed the authority granted by contract is

not backed by the insurer

Under the Law of Agency, the principal is considered to be

the insurer

An arrangement where an individual is authorized to act on behalf of another person or company is established through

the law of agency

Which situation would not require the insured's consent when a life insurance policy is issued?

A policy is purchased by a parent for a minor child

What qualifies as acceptance of an insurance contract offer?

An issued policy

Use of XYZ Insurance Company brochures, business cards, and rating guides is an example of

Apparent authority

Which of these is true regarding the exchange of consideration among parties involved in an insurance contract?

Can be unequal

The insurer's obligation to pay a claim depends on whether the insured of beneficiary has complied with all policy conditions. This makes the policy a(n)

Conditional contract

An insurance application requires an applicant to make a full, accurate disclosure of the risk factor involved. Using this criteria, an insurance policy is considered what type of contract?

Contract of utmost good faith

XYZ Insurance Company gives direct authority to its producers to sell insurance through an agency contract, but nothing is stated regarding the collection of premiums. Which authority grants the producer the right to collect premiums?

Implied authority

When must insurable interest exist for a life insurance contract to be valid?

Inception of the contract

Which of the following situations would an insurance agent need to guard against liability for professional errors and omissions?

Making a recommendation to a potential insured to replace existing coverage

Which of the following relationships demonstrates insurable interest in the absence of economic interest?

Marriage partners

Insurable interest involves what assumption?

One person benefits from another person's continued life

All of these statements correctly describe an aleatory contract EXCEPT

Only one party makes any kind of legally enforceable offer

An insured is entitled to coverage under a policy that a prudent person would expect it to provide. This principle is called

Reasonable expectations

Which of the following would NOT have a restricted ability to enter into a contract?

Small employer

A contract is considered void in all of the following situations EXCEPT

When consideration is unequal

Voluntarily terminating an insurance policy is also known as

cancellation

The payment of the first premium, the promise to pay a covered loss, and the agreement to abide by policy conditions are all examples of

consideration

An appointed producer's implied authority is derived from

express authority

The unwritten authority given to a producer to carry out necessary incidental acts of the agency agreement is called

implied authority

During the application process, a statement made by an applicant that becomes part of the contract is considered to be a(n)

warranty