CH1 Flashcards
What is Insurance?
the transfer of risk of loss.
What is Consideration?
The binding force in any contract is the consideration.
The consideration on the part of the insured is…
the payment of premium and the representations made in the application
The consideration on the part of the insurer is…
the promise to pay in the event of loss.
What is Aleatory Contract?
is an exchange of unequal amounts or values.
What are 2 Distinct Characteristics of an Insurance Contract?
- Contract of Adhesion
- Aleatory Contract
What is Contract of Adhesion?
A contract of adhesion is prepared by one of the parties (insurer) and accepted or rejected by the other party (insured)
What are Representations?
statements believed to be true to the best of one’s knowledge, but they are not guaranteed to be true.
A life insurance producer is the company’s…
field underwriter.
What are Warranties?
an absolutely true statement upon which the validity of the insurance policy depends
What does Conditional receipt mean?
means the applicant may be covered as early as the date of the application.
What is Underwriting?
the process in which an insurance company determines whether or not a particular applicant is insurable, and if so, what premium to charge.
What does The Gramm-Leach-Bliley Act stipulate?
stipulates that in general, an insurance company may not disclose nonpublic personal information to a nonaffiliated third party
