Chapter 3: Legal Concepts

Which of the following BEST describes a conditional insurance contract?

A contract that requires certain conditions or acts by the insured individual

Which of the following is an example of the insured's consideration?

A paid premium

The deeds and actions of a producer indicate what kind of authority?

Apparent

What is implied authority defined as?

Authority that is not specifically given to an agent contract, but that an agent can reasonably assume to carry out his/her duties

Intentional withholding of a material facts that would affect an insurance policy's validity is called a(n)

Concealment

In an Insurance contract, the element that shows each party is giving something of value is called

Consideration

The authority granted to a licensed producer is proved via the

Law of Agency

Which contract element is insurable interest a component of?

Legal purpose

Which type is 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

A professional liability for which producers can be sued for mistakes of putting a policy into effect is called

Errors and omissions

What makes an insurance policy a unilateral contract?

Only the insurer is legally bound

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, while the insurer will deal fairly with the insured and it's

Promise made

In an insurance contract, the applicant's "consideration" is the

Statements made in the application and the premium

According to the life insurance contact law, insurable interest exists

at the time of application

The power given to an individual producer that is not specifically addressed in his/her contract is considered what type of authority?

implied