Completing the Application, Underwriting, and Delivering the Policy

insurance policies are not drawn up through negotiations, and an insured has little to say about its provisions. What contract characteristic does this describe?

adhesion

An insured pays $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristic of an insurance contract does this describe?

Aleatory

Which of the following best describe the concept that the insured pays a small amount of premium for a large amount of risk on the part of the insurance company?

Aleatory

An applicant is denied insurance because of information found on a consumer report. Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company?

Fair Credit Reporting Act

Another name for a substandard risk classification is ____.

Rated since these policies could be issued with the premium rated-up, resulting in a higher premium

When must insurable interest exist in a life insurance policy?

at the time of application

_____ is something of value that is transferred between the two parties to form a legal contract

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:

contracts of adhesion Insurance policies are written by the insurer and submitted to the insured on a take -it-or-leave-it basis. The insured does not have any input into the contract, but simply adheres to the contract

Most agents try to collect the initial premium for submission with the application. When an agent collects the initial premium from the applicant, the agent should issue the applicant a _______.

premium receipt

insurance is the transfer of what?

risk

In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports?

the consumer's associates, friends, and neighbors provide the report's data

in insurance polices, the insured 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