chapter 3 quiz
Which situation would not require the insured's consent when a life insurance policy is issued?
- -a minor child
A producer working for an insurance company may be personally liable for
- -acts performed which are prohibited in agency contract
Insurable interest involves what assumption
-- One person benefits from another person's continued life
Which of these is true regarding the exchange of consideration among parties involved in an insurance contract?'
-- When consideration is unequal
All of these statements correctly describe an aleatory contract EXCEPT
Only one party makes any kind of legally enforceable offe
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
Voluntarily terminating an insurance policy is also known as
--cancellation
An insured is entitled to coverage under a policy that a prudent person would expect it to provide. This principle is called
--reasonable expectations
An insurance contract may be voided if a misrepresentation found on the application is determined to be.
---Material
What is the insurer responsible for when a producer is acting within the scope of authority granted in the agency contract?
-- Responsible for acts by the producer that are authority only
An insurance company can be liable for a producer's unauthorized acts
--- when the agency contract is unclear concerning the authority given
The insurer's obligation to pay a claim depends on whether the insured or beneficiary has complied with all policy conditions. This makes the policy a(n)
---conditional contract
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
Which situation would not require the insured's consent when a life insurance policy is issued?
---policy purchased by a parents for a minor
Use of XYZ Insurance Company brochures, business cards, and rating guides is an example of
--apparent authority
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
The courts will normally interpret a policy in favor of the insured when the meaning of the policy is not clear. This is because an insurance policy is a(n)
--contract of adhesion
Christopher is issued an insurance policy that contains an attached agreement which alters the terms of the policy. This attached agreement is called a(n)
--endorsement
An appointed producer's implied authority is derived from
--express authority
When must insurable interest exist for a life insurance contract to be valid?
--inception of the contract
What qualifies as acceptance of an insurance contract offer?
--issued policy
An arrangement where an individual is authorized to act on behalf of another person or company is established through
--law of agency
Which of these do NOT indicate the presence of insurable interest in a life insurance contract?
--lifelong friendship
Greg applies for insurance and makes a false statement on the application that will influence whether or not the insurer will accept the risk. Greg's false statement is called a(n)
--material misrepresentation
Which element of a contract constitutes a definite and unqualified proposal by one party to another?
--offer
statements made by an insured on an accident and health insurance application are considered to be
--representations
Under the Law of Agency, the principal is considered to be
--the insurer
Giving up a known right on a voluntary basis is called a(n)
--waiver
An agreement is reached when an insurance contract is formed. Which of the following is NOT considered to be an element of an agreement?
equity