Life Insu 2-Legal concepts
without ___ in the insured a life insurance contract is not enforceable ; for instance, ___ usually have this interest in the life of one another ; it must only exist at the ___of the appllication
insurable interest ; spouses ; time
what is a warranty?
is a statement guaranteed to be true
Applicant are presumed competent unless-
mentaly ill, under influence, or minor
people who buy life insurance are called ___rather than____ because they can transfer their ownership, which is called___
policy owners ; policy holders ; assignment
considered to be true and accurate to the best of the applicants' belief ; FAILURE by the applicant to disclose a known material fact when applying for insurance
representation ; concelament
Investor-originated life insurance (or IOLI), sometimes called _____-originated life insurance (or STOLI) is used to _____ state insurable interest statutes.
stranger; circumvent
Insurance contract are ___meaning only the insurer makes an enforceable ____
unilateral;promise
to be legally enforceable a contract must be made with a definite _____ proposal offer ; an offer answered by a counter offer is __
unqualified ; void
insurance applicants are required to make a full, fair, and honest disclosure of the risk to the agent
utmost good faith
life insurance contracts are ___contracts; pays a stated sum regardless of the amount loss
valued
The part of a life insurance policy guaranteed to be true is called a
warranty
A life insurance policy would be considered a wagering contract WITHOUT
insurable interest
insurance contracts are contracts of ___ meaning contract was prepared by the insurer "____" with no negotiation
ashesion ; as is
Insurance contracts are known as ____ because certain future conditions or acts must occur before any claims can be paid.
conditional
life insurance is ____meaning that the pay of benefits is dependent on an event covered by the contract
conditional
An insured that owns 50,000 in fire insurance suffers a 5000 loss so they only get 5,000-What type of Contract? ; examples of these types of contracts are_____&___insurance
indemnity ; health and fire
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
Life and health insurance policies are:
Bilateral contracts
Taking receipt of premiums and holding them for the insurance company is an example of
Fiduciary responsibility
Unilateral, aleatory, and adhesion are all special features of ____ contracts.
INSURANCE
In regards to representations or warranties, which of these statements is TRUE?
If material to the risk, false representations will void a policy
If a contract of adhesion contains complicated language, to whom would the interpretation be in favor of?
Insured
Which of these arrangements allows one to bypass insurable interest laws?
Investor-Originated Life Insurance
A life insurance arrangement which circumvents insurable interest statutes 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)
life insurance where investors or strangers get individuals or seniors to take out a policy naming the investor as beneficiary ; they generally ___money to the insured
Stranger Originated life Ins. or Investor -Originated Life Ins; loan
A policy of adhesion can only be modified by whom?
The insurance company
At what point does an informal contract become binding?
When one party makes an offer and the other party accepts that offer
