other insurance concepts
Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first six months. Q dies suddenly and the beneficiary is paid $500,000. This exchange of unequal values reflects which of the following insurance contract features?
Aleatory
Taking receipt of premiums and holding them for insurance company is an example of
Fiduciary reasonability
In regards to representations or warranties which of these statements is true?
If material to the risk false representations will void a policy
Which of these arrangements allows one to bypass insurable interest laws?
Invester-originated life insurance
Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of the following contractual elements?
Legal purpose (insurable interest)
The consideration clause of an insurance contract includes.
The schedule and amount of premiums payments
Which of these is considered a statement that is assured to be true in every respect?
Warranty
A contract where one party either accepts or rejects the terms of a contract written by another party is called a contract of
adhesion
A contract where one party either accepts or rejects the terms of an contract wirtten by another party is called a contract of
adhesion
All of the following are considered to be typical characteristics describing the nature of an insurance contract EXCEPT
bilateral
Which of the following consist of an offer, acceptance, and consideration?
contract
insurance policies are offered on a take it or leave it basis, which make them?
contracts of adhesion
a life insurance contract would be considered a wagering contract WITHOUT:
insurable interest
When third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have
insurable interest in the proposed insured
If a contract of adhesion contains complicated language, to whom would the interpretation be in favor of?
insured
A life insurance arrangement which circumvents insurable interest status is called
investor-oriented life insurance
Which of these is NOT considered to be an element of an insurance contract
negotiating
Insurance policies are considered aleatory contracts because
performance is conditioned upon a future occurrence
Which of these is not a type of agent authority?
principle
What is the consideration given by an insurer in the consideration clause of an life policy
promise to pay a death benefit to a named beneficiary.
Which of these BEST describes a warranty?
statement guaranteed to be true
A policy of adhesion can only be modified by whom?
the insurance company
In an insurance contract, the insurer is the only party who makes a legally enforceable promise. What kind of contract is this?
unilateral
When must insurable interest be present in order for a life insurance policy to be valid
when the application is made