Insurance 3

Which of the following is an expample of legal consideration?

Initial premium

The Authority that an insurer gives to its agents by means of the agent's contract is known as

express authority

An insurer is considered competent if it

is lincensed or authorized by the state

Bob and Tom enter into a contract in which Bob agrees to fraudulently induce sick people to sell their insurance contracts to Tom's company. Bob and Tom's contract can best be desribed as

void

Which of the following statements describe the parol evidence rule?

A written contract cannot be changed by oral evidence

Competent parties who can enter into insurance contracts are

Applicants, Trusts and Estates, Business Entities

With life and health contracts, when must an insurable intrerest exist?

At the inception of the policy

Which of the following is a distinguishing characteristic of an insurance contract?

Conditional

Which of the following statements about authority is NOT correct? A) Express authority is granted by the means of the agent's contract. B) Express authority is determined by a principal's conduct. C) Implied authority is not overtly extended in the agent's contracts but does permit many of the agent's operations. D) Apparent authority can be assumed from the actions of the principal.

B) Express authority is determined by a principal's conduct.

Which of the following statements regarding utmost good faith in insurance contracts is CORRECTS? A) The concept of untmost good faith-that there is no attempt to conceal, disguise, or deceive- applies only to the insurer. B) Although a warranty is a statement, it is not techncally part of the contract C) A representation is a statement that the applicant guarantees to be true. D) Most state insurance laws consider statements made in an application for an insurance policy to be representations, not warranties.

D) Most state insurance laws consider statements made in an application for an insurance policy to be representations, not warranties.

Which of the following statements describes an insurable interest?

The policyowner must expect to suffer a loss when the insured dies or becomes disabled

An insurance company has how many years to challenge the validity of a life insurance contract?

Two

Which of the following terms is used for the voluntary relinquishment of a known right?

Waiver

Which of the following statements regarding insurable interest is NOT correct? A) Insurable interest exists when the applicant is the insured. B) A policy obtained by a person witout an insurable interest in the insured can be enforced. C) The applicant must be subject to loss upon the death, illness, or disability of the insured. D) Generally, the person to be insured must give consent before a policy is issued, even if the applicant has an insurable interest.

B) A policy obtained by a person witout an insurable interest in the insured can be enforced.

"An insurance contract is prepared by one party,the insurer, rather than by negotiation between the contracting parties." Which of the following statments explains this characteristic of insurance contracts?

The insurance contract is a contract of adhesion