Xcel ch 3
which contract element is insurable interest the component of?
legal purpose
the insurance company agrees to pay a predetermined amount - the face amount, in exchange for consideration (premium)
life insurance
according to the principle of utmost good faith, the insured will answer questions on the application to the best of their knowledge and pay the required premium, the insurer will deal fairly with the insured and it's
promises made
order an applicant's statements concerning occupation, hobbies, and personal health history regarded as?
representation
in a life or health insurance contract, "consideration" would be the
statements made in the application and the premium
under a contract of adhesion,
the terms must be accepted or rejected in full
legal purpose is a term used in contract law meaning
there must be legal reasons for entering into the contract
life insurance contracts are valid contracts, which means it will pay a stated amount
valued contract
Consideration
what both insured and insurer promises to bring to a contract something of legal value given in exchange for a promise
four elements of a contract
1. consideration 2. legal purpose 3. offer and acceptance 4. competent parties
health insurance contracts are Indemnity contracts and will only reimburse the actual cost of the loss (pay medical bills Etc)
Indemnity contract you cannot profit from an Indemnity contract
the following BEST describes a conditional insurance contract?
a contract that requires certain conditions or acts by the insured individual
insurable interest does NOT occur in which of the following relationships?
business owner and business client CORRECT: sister and brother, parents and children, business partners
all the following are elements of an insurance policy EXCEPT
claim forms CORRECT: definitions, other insurance, conditions
The Authority granted to a licensed producer is provided via
law of agency according to the law of agency, the producer/agent represents the principal/insurer and is granted actual, implied and apparent authority to act on behalf of the insurer. The law of agency makes the principal responsible for these acts of the agent.
in an insurance contract, the element that shows each party is giving something of value is called
consideration
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
In order for contract to be valid, it must
contain an offer and acceptance
a professional liability for which producers can be sued for mistakes of putting a policy into effect is called
errors and omissions
the insurance company agrees to pay a percentage of the insurance medical bills in exchange for consideration (premiums)
health insurance
who is responsible for assembling the policy forms for insureds?
insurance carriers
ambiguities in an insurance policy are always resolved in favor of the
insured
what makes an insurance policy a unilateral contract?
only the insurer is legally bound