Chapter 3 - Legal Concepts
Which of the following is present when an applicant stands to lose value if the insured dies?
- Insurable interest Insurability Offer and acceptance consideration
Intentional withholding of material facts that would affect an insurance policy's validity is called a(n)
Concealment
When the principle gives the agent authority in writing, it's referred to as
Express authority
The power given to an individual producer that is not specifically addressed in his/her contract is considered what type of authority?
Implied
Who is responsible for assembling the policy forms for insureds?
Insurance carriers
______ is NOT an element of a valid contract legal consideration competent parties countersignature
countersignature
What are an applicant's statements concerning occupation, hobbies, and personal health history regarded as?
representation
which of the following best describes a conditional insurance contract?
A contract that requires certain conditions or acts by the insured individuals
Which of the following is an example of the insured's consideration?
A paid premium
The term which describes the fact that both parties of a contract may NOT receive the same value is referred to as
Aleatory
The deeds and actions of a producer indicate what kind of authority?
Apparent ( is the appearance or assumption of authority based on action, words or deeds of the producer
The deeds and actions of a producer indicate what kind of authority?
Apparent - appearance or assumption of authority
What is implied authority defined as?
Authority that is not specifically given to an agent in the agency contract, but that an agent can reasonably assume to carry out his/her duties
Which type of clause describes the following statement: "We have issued the policy in consideration of the representations in your applications and payment of the first-term premium".
Consideration clause
The authority granted to a licensed producer is provided via the A. producer's apparent authority B. written contract C. Law of Agency D. Principal Capacity
Law of agency
What makes an insurance policy a unilateral contract?
Only the insurer is legally bound
Legal purpose is a term used in contract law meaning
There must be legal reasons for entering into the contract
In an insurance contract. the insurer is the only party legally obligated to perform, Because of this the insurance contract is considered
Unilateral
According to life insurance contract law, insurable interest exists
at the time of application
All of the following are elements of an insurance policy EXCEPT definitions other insurance claim forms conditions
claim forms
All of the following are elements of an insurance policy except
claim forms -definitions -other insurances -conditions
In an insurance contract, the element that shows each party is giving something of value is called
consideration
In order for a contract to be valid, it must
contain an offer and acceptance
Which contract element is insurable interest a component of?
legal purpose
According to the principle of utmost good faith, the insured will answer questions on the best of their knowledge and pay the required premium, while the insurer will deal fairly with the insured and its
promise made
In an insurance contract, the applicant's "consideration" is the
statements made in the application and the premium
Under a contract of adhesion
the terms must be accepted or rejected in full