Legal Concepts of Life Insurance
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 Adhesion
Taking receipt of premiums and holding them for the insurance company is an example of
Fiduciary responsibility
In regards to representations or warranties, which of these statements is TRUE?
If material to the risk, false representations will void a policy
Which of these arrangements allows one to bypass insurable interest laws?
Investor-Originated Life Insurance
A life insurance arrangement which circumvents insurability statues is called
Investor-originated Life insurance
Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of the following contractual elements?
Legal Purpose (Insurable Interest)
At what point does an informal agreement become a binding contract?
When consideration is provided by one of the parties to the contract
A contract where one party either accepts or rejects the terms of a contract written by another party is called a contract of
adhesion
All of the following are considered to be typical characteristics describing the nature of an insurance contract EXCEPT
bilateral
Insurance contracts are known as ____ because certain future conditions or acts must occur before any claims can be paid.
conditional
A life insurance policy would be considered a wagering contract WITHOUT
insurable interest
A policy of adhesion can only be modified by whom?
insurance company
If a contract of adhesion contains questionable language, to whom would the interpretation be in favor of?
insured
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
In an insurance contract, the insurer is the only party who makes a legally enforceable promise. What kind of contract is this?
unilateral
Life and health insurance policies are
unilateral contracts
