CH 3 Life insurance

What does "liquidity" refer to in a life insurance policy?

Cash values can be borrowed at any time

The failure to disclose known facts is known as

Concealment

When an insured makes truthful statements on the application for insurance for insurance and pays the required premium, it is known as which of the following?

Consideration

Contracts that are prepared by one party and submitted to the other party on a take-it or leave-it basis are classified as

Contract of adhesion

Which of the following best describes the aleatory nature of an insurance contract?

Exchange of unequal values

Part 2 of the application for life insurance provides questions regarding what?

Family health history, alcohol and tobacco consumption, and recent surgeries

Which of the following methods of calculating the amount of life insurance needed takes into account the insured's wages, years until retirement, and inflation?

Human life value approach

When Y applied for insurance and paid the initial premium on August 14, has was issued a conditional receipt. During the underwriting process, the insurance company found no reason to reject the risk or classify it other than as standard. Y was killed in an automobile accident on August 22, before the policy was issued. In this case, the insurance company will

Issue the policy anyway and pay the face value to the beneficiary

Which of the following information about the applicant is NOT included on Part 1 of the application for insurance?

Medical background

What is used to determine Human Life Vale Approach

The calculation of probable future earning of the insured, which involves wages, expenses, inflation, amount of time until retirement, and the time value of money.

Which of the following is an example of liquidity in a life insurance contract?

The cash value available to the policyowner

The key factor of representation that allows the injured party to rescind the contract is

The key factor of representation that allows the injured party to rescind the contract is

In insurance policies, the insured is not legally is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe?

Unilateral

What are some costs associated with death?

final medical expenses of the insured, day to day expenses of maintaining the family, funeral expenses