General Insurance Concepts - Health Insurance

Because an agent is using stationery with the logo of an insurance company, applicants for insurance assume that the agent is authorized to transact on behalf of that insurer. What type of agent authority does this describe?

Apparent Apparent authority (also known as perceived authority) is the appearance or the assumption of authority based on the actions, words, or deeds of the principal or because of circumstances the principal created.

An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?

Consideration The binding force in any contract is consideration.

Untrue statements on the application unintentionally made by insureds that, if discovered, would alter the underwriting decision of the insurance company, are called

Material Misrepresentations

A participating insurance policy may do which of the following?

Pay dividends to the policyowner

What is a Representation?

Statements beleived to be true to the best of one's knowledge, but they are not guaranteed to be true. For insurance purposes, representations are the answers the insured gives to the questions on the insurance application.

What are representations?

Statements believed to be true.

Peril is most easily defined as

The cause of loss insured against

What is misrepresentation?

Untrue statements on the application that could void the contract. A material misrepresentation is a statement that, if discovered, would alter the underwriting decision of the insurance company. If material misrepresentations are intentional they are fraud.