Chapter 3 - Legal Concepts

Which of the following is present when an applicant stands to lose value if the insured dies?

- Insurable interest Insurability Offer and acceptance consideration

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

Concealment

When the principle gives the agent authority in writing, it's referred to as

Express authority

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

Implied

Who is responsible for assembling the policy forms for insureds?

Insurance carriers

______ is NOT an element of a valid contract legal consideration competent parties countersignature

countersignature

What are an applicant's statements concerning occupation, hobbies, and personal health history regarded as?

representation

which of the following best describes a conditional insurance contract?

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

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

A paid premium

The term which describes the fact that both parties of a contract may NOT receive the same value is referred to as

Aleatory

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

Apparent ( is the appearance or assumption of authority based on action, words or deeds of the producer

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

Apparent - appearance or assumption of authority

What is implied authority defined as?

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

Which type of 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

The authority granted to a licensed producer is provided via the A. producer's apparent authority B. written contract C. Law of Agency D. Principal Capacity

Law of agency

What makes an insurance policy a unilateral contract?

Only the insurer is legally bound

Legal purpose is a term used in contract law meaning

There must be legal reasons for entering into the contract

In an insurance contract. the insurer is the only party legally obligated to perform, Because of this the insurance contract is considered

Unilateral

According to life insurance contract law, insurable interest exists

at the time of application

All of the following are elements of an insurance policy EXCEPT definitions other insurance claim forms conditions

claim forms

All of the following are elements of an insurance policy except

claim forms -definitions -other insurances -conditions

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

consideration

In order for a contract to be valid, it must

contain an offer and acceptance

Which contract element is insurable interest a component of?

legal purpose

According to the principle of utmost good faith, the insured will answer questions on the best of their knowledge and pay the required premium, while the insurer will deal fairly with the insured and its

promise made

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

statements made in the application and the premium

Under a contract of adhesion

the terms must be accepted or rejected in full