Legal Concepts

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

A Warranty

Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first six months. Q dies suddenly and the beneficiary is paid $500,000. This exchange of unequal values reflects which of the following insurance contract features?

Aleatory

All of the following are considered to be typical characteristics describing the nature of an insurance contract, except:

Bilateral

Which of the following consists of an offer, acceptance, and consideration?

Contract

Insurance policies are offered on a "take it or leave it" basis, which make them:

Contracts of Adhesions

E and F are business partners. Each takes out $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 proceeds from E's life insurance policy be directed to?

F

In regards to representations or warranties, which of these statements is true?

If material to the risk, false representations will void a policy.

When must insurable interest exist for a life insurance contract to be valid

Inception of the contract

When 3rd party ownership is involved, applicants who also ahppen to be the stated primary beneficiary are required to have:

Insurable interest in the proposed insured

Who makes the legally enforceable promises in a unilateral insurance policy?

Insurance Company

If a contract of adhesion contains complicated language, to whom would the interpretation be in favor of?

Insured

Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of the following contractual elements?

Legal Purpose (insurable interest)

Which of these is NOT considered to be an element of an insurance contract? The Offer Acceptance Negotiating Consideration

Negotiating

Insurance policies are considered aleatory contracts because

Performance is conditioned upon a future occurrence

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

Representations

A policy of adhesion can only be modified by whom?

The Insurance Company

The Consideration clause of an insurance contract includes

The schedule and amount of premium payments

Life and Health Insurance policies are

Unilateral Contracts

The part of a life insurance policy guaranteed to be true is called a(n):

Warranty

Insurance contracts are known as __ because certain future conditions or acts must occur before any claims can be paid

conditional