CH. 2 Legal Concepts

Insurable interest must exist at what time? At the time of application At the time of delivery At the time of death At all times

At the time of application

When must insurable interest be present in order for a life insurance policy to be valid? When the insured dies Within the incontestability period At the time of application Before the insured dies

At the time of application

Which of these require an offer, acceptance, and consideration? Warranty Estoppel Contract Representation

Contract

Insurance policies offered on a "take it or leave it" basis are considered what? Conditional Contracts Aleatory Contracts Unilateral Contracts Contracts of Adhesion

Contracts of Adhesion

Which of these is NOT a type of agent authority? Express Implied Principal Apparent

Principal

What is the consideration given by an insurer in the Consideration clause of a life policy? Promise to never cancel coverage Promise to pay a death benefit Promise to not raise premiums Promise to pay a policy dividend

Promise to pay a death benefit

A policy of adhesion can only be modified by whom? The agent The applicant The primary beneficiary The insurance company

The insurance company

Which of these is considered a statement that is assured to be true in every respect? Estoppel Warranty Guarantee Representation

Warranty

When third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have all statements be warranties insurable interest in the proposed insured the agent complete a third-party application all those involved be family-related

insurable interest in the proposed insured

Statements made on an insurance application that are believed to be true to the best of the applicant's knowledge are called representations consideration warranties guarantees

representations

The Consideration clause of an insurance contract includes the buyer's guide a summary of the coverage provided the named beneficiaries the schedule and amount of premium payments

the schedule and amount of premium payments

The part of a life insurance policy guaranteed to be true is called a(n) representation exclusion warranty waiver

warranty

E and F are business partners. Each takes out a $500,000 life insurance policy on the other, naming himself as primary beneficiary. E and F eventually terminate their business, and four months later E dies. Although E was married with three children at the time of death, the primary beneficiary is still F. However, an insurable interest no longer exists. Where will the proceeds from E's life insurance policy be directed to? F The dissolved partnership E's family E's estate

F

Who makes the legally enforceable promises in a unilateral contract? Beneficiary Insurer Insured Applicant

Insurer (Insurance Company)

An agent is an individual that represents whom? Insurer Insured Broker Himself/Herself

Insurer. An agent is an individual who is authorized by an insurer to sell goods and services on its behalf. An agent is also the insurer's representative in dealing with the public.

Which of these arrangements allows one to bypass insurable interest laws? Concealment Indemnity contract Contract of adhesion Investor-Originated Life Insurance

Investor-Originated Life Insurance