Contract Law
Which of the following best describes a misrepresentation?
A statement intended to distract, mislead, or deceive a party to a contract
Which of the following best describes the concept that the insured pays a small amount of a premium for a large amount of a risk on the part of the insurance company?
Aleatory
A policy available to business owners that provides payment for normal business expenses in the event that the owner is disabled is called
Business Overhead Expense
Which of the following would describe a legal document which would dictate who can buy a deceased partner Los share of a business and for what amount?
Buy sell agreement
Which of the following is a generic consumer publication that explains life insurance in general term in order to assist the applicant in the decision making process
Buys guide
If found material for underwriting a misrepresentation
Can void a contract
What does liquidity refer to in a life insurance policy ?
Cash value can be borrowed at any time.
An insurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. What contract characteristic does this describe?
Conditional
Contract that are prepared by one party and submitted to the other party on take it or leave it basis are classified as
Contract of adhesion
Factual statements about the insured or the risk in an insurance policy are considered.
Express warranty
Harry has just received his life insurance policy, in reviewing the title page, harry was able to ascertain in the following information except ?
His spouse had been assigned the primary beneficiary
Which of the following method the amount of life insurance needed takes into account the insured's wages years until retirement and inflation ?
Human life value approach
what is the term used when a person sells his assets as a way to gain money
Liquidation
Attempting to determine how much insurance an individual would require based upon their financial objective is know as
Needs approach
Part 2 of the application for the life insurance provides questions regarding all of the following Except
Other insurance coverage
The written instrument in which a contract a of insurance is set forth, is known as the
Policy
In insurance, an offer is usually made when
The completed application is submitted
When the insured receives a written binder.
The insured coverage will be effective immediately
The importance of misrepresentation is determined by
The materiality of a given concealment
What is the purpose of the buyers guide?
To allow the consumer to compare the costs of different policy's
What is the purpose of key person insurance?
To lessen the risk of financial loss because of the death of a key employee
What is the wrongful act or the violation of someone's right that leads to legal liability called?
Tort
Because of insurance policy is a contract between the insurer and the insured it must confirm to the state laws governing contracts which require all of the following elements Except
Conditions
Which of the following is Not a required element of an insurance contract?
Counteroffer
