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