Questions and Answers
In an insurance contract, what is the applicant's 'consideration'?
Which of the following is an example of the insured's consideration?
A paid premium
What is the intentional withholding of material facts that would affect an insurance policy's validity called?
Concealment
According to the principle of Utmost Good Faith, what will the insurer do?
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What is implied authority defined as?
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What is the professional liability for which producers can be sued for mistakes in putting a policy into effect called?
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What type of authority is given to an individual producer that is not specifically addressed in his/her contract?
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What makes an insurance policy a unilateral contract?
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When does insurable interest exist according to life insurance contract law?
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Which type of clause describes: 'We have issued the policy in consideration of the representations in your applications and payment of the first-term premium'?
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Which contract element is insurable interest a component of?
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What do the deeds and actions of a producer indicate?
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How is the authority granted to a licensed producer proven?
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What element in an insurance contract shows that each party is giving something of value?
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Which of the following BEST describes a conditional insurance contract?
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Study Notes
Key Legal Concepts in Insurance
- Consideration in Insurance Contracts: Refers to the statements made in the application and the payment of the premium by the applicant.
- Insured's Consideration: The act of paying a premium serves as the insured's consideration in the contract.
- Concealment Defined: The intentional withholding of material facts that can impact the validity of an insurance policy.
- Utmost Good Faith Principle: Ensures that the insured provides accurate information and pays premiums while the insurer agrees to act fairly and uphold their promises.
- Implied Authority: The authority not explicitly granted in an agent's contract, which an agent assumes to fulfill their responsibilities effectively.
- Errors and Omissions: Professional liability that allows producers to be sued for mistakes made while arranging insurance policies.
- Unilateral Contract Principle: An insurance policy is classified as unilateral because only the insurer is legally obligated to fulfill the contract's terms.
- Insurable Interest Requirement: Must exist at the time of application for a valid life insurance contract.
- Consideration Clause: A statement in the insurance policy that acknowledges issuance based on application representations and first-term premium payment.
- Legal Purpose Component: Insurable interest is part of this essential element required for an insurance contract's legitimacy.
- Apparent Authority Indicated by Actions: The deeds and actions of a producer indicate what authority they appear to possess.
- Law of Agency Proof: The authority granted to a licensed producer is established through the legal framework of the Law of Agency.
- Consideration Element: Demonstrates that each party in an insurance contract offers something of value; essential for contract validity.
- Conditional Insurance Contract: A type of contract that stipulates certain conditions or actions must be fulfilled by the insured for the policy to be valid.
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Description
Test your knowledge on key legal concepts in insurance with these flashcards from Chapter 3. Each card covers essential terms and definitions that are crucial for understanding insurance contracts. Perfect for students looking to reinforce their learning on this important subject.
