Contract Law

Which of the following best describes a misrepresentation?

A statement intended to distract, mislead, or deceive a party to a contract

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

Aleatory

A policy available to business owners that provides payment for normal business expenses in the event that the owner is disabled is called

Business Overhead Expense

Which of the following would describe a legal document which would dictate who can buy a deceased partner Los share of a business and for what amount?

Buy sell agreement

Which of the following is a generic consumer publication that explains life insurance in general term in order to assist the applicant in the decision making process

Buys guide

If found material for underwriting a misrepresentation

Can void a contract

What does liquidity refer to in a life insurance policy ?

Cash value can be borrowed at any time.

An insurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. What contract characteristic does this describe?

Conditional

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

Contract of adhesion

Factual statements about the insured or the risk in an insurance policy are considered.

Express warranty

Harry has just received his life insurance policy, in reviewing the title page, harry was able to ascertain in the following information except ?

His spouse had been assigned the primary beneficiary

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

Human life value approach

what is the term used when a person sells his assets as a way to gain money

Liquidation

Attempting to determine how much insurance an individual would require based upon their financial objective is know as

Needs approach

Part 2 of the application for the life insurance provides questions regarding all of the following Except

Other insurance coverage

The written instrument in which a contract a of insurance is set forth, is known as the

Policy

In insurance, an offer is usually made when

The completed application is submitted

When the insured receives a written binder.

The insured coverage will be effective immediately

The importance of misrepresentation is determined by

The materiality of a given concealment

What is the purpose of the buyers guide?

To allow the consumer to compare the costs of different policy's

What is the purpose of key person insurance?

To lessen the risk of financial loss because of the death of a key employee

What is the wrongful act or the violation of someone's right that leads to legal liability called?

Tort

Because of insurance policy is a contract between the insurer and the insured it must confirm to the state laws governing contracts which require all of the following elements Except

Conditions

Which of the following is Not a required element of an insurance contract?

Counteroffer