Insurance Contracts and Regulation Quiz

Deliberately withholding material facts when applying for insurance is called: concealment waiver collusion twisting

Concealment - Concealment is deliberately withholding material facts when applying for insurance. If the concealed facts would have changed the insurer's decision to offer the insurance policy, then the insurer can void the insurance contract.

How long from when an insurance contract is issued does an insurance company have to void a life insurance policy on the basis of fraud? 18 months 6 months 24 months 12 months

24 months - The time during which an insurer can void a life insurance policy for fraud is typically limited to two years from the date the contract was signed and issued.

If an applicant for an insurance policy submits an application without the first premium, which of the following is correct? The insurer has made an offer to the applicant. The insurer may not make a counteroffer to the applicant. The applicant has invited the insurer to make an offer. The applicant has made an offer to the insurer.

The applicant has invited the insurer to make an offer. - When an applicant submits an application without the first premium, the insurer is not prevented from later making a counteroffer to the applicant.

What will result if an insured decides to stop paying premiums for his or her insurance policy? The insured has breached the terms of the contract. The insurance company can require the insured to continue paying the premiums. The insurance company must return all premiums that have been paid if no claims have been made under the policy. The insurance company is released from its promise to pay benefits and the contract expires.

The insurance company is released from its promise to pay benefits and the contract expires. - An insurance contract is a unilateral contract, which means that only one party-the insurer-makes a promise that can be enforced. The insured must only pay the first premium. The insurer cannot require the policyowner to pay more premiums. However, if the policyowner does not pay any required premiums, the insurer is released from its promise to pay the benefit and the contract expires.