life insurance contract law

rescission

The practice of one party canceling or terminated a contract, which has the effect of returning the parties to their original positions before the contract was made.

conditional contract

certain conditions and parameters must be met by the owner and the company in order for the contract to be executed.

consequences of rescission in insurance

client loses right to claim policy, insurer refunds all money paid

personal contract

contract between the insurance company and an individual

agreement

definite offer by one party that is accepted as is by another party.

intentional tort

deliberate act that causes harm to another person regardless of whether the offending part intended to injure.

principle of utmost good faith

each party must be able to rely on the other for valid and critical information

competent parties

generally, all parties must be capable of the contract's agreement in the eyes of the law. must be of legal age, not drugged, and mentally able to understand the contract

jail time of penal code section 550

imprisonment in a county jail for 1 year or instate prison for 2,3 or 5 years

legal purpose

the purpose of the contract must be legal and not against public policy

contract of adhesion

when the contract is prepared by one party (insurer) and accepted or rejected by the other party (the insured), the 'take it or leave it'

contracts

written agreements that are legally enforceable by law

warranty

written guarantee that all information provided is true and accurate

policy

written instrument in which a contract of insurance is set forth

unilateral

a contract in which only one party is legally bound to do anything.

aleatory

a contract in which unequal amounts or values are exchanged.

4 components of a contract

agreement, competent parties, legal purpose, consideration

unintentional tort

also known as negligence, tort resulting from lack of proper care

fines of penal code section 550

not to exceed 150 or double the value of the fraud

penal code section 550

it is illegal to intentionally: conspire to file a false or fraudulent claim, making more than one claim for a single loss, and creating paperwork or making an oral statement to support an illegal claim

concealment

legal term for the intentional withholding of information of a material fact which is crucial in making a decision.

tort

private, civil, non-contractual wrong for which a remedy through legal action may be sought.

consideration

the binding force of the contract, something of value that each party gives to the other.