Chapter 3: Legal Concepts of the insurance contract Flashcards
When must insurable interest exist for a life insurance contract to be valid
inception of the contract
The part of a life insurance policy guaranteed to be true is called a:
warranty
A life insurance arrangement with circumvents insurable interest statutes is called:
investigator-originated life insurance
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 the following BEST describes a warranty
statement guaranteed to be true
Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of the following contractual elements?
legal purpose (insurable interest)
statements made on an insurance application that are believed to be true to the best of the applicants knowledge are called:
representations
When third party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have:
insurable interest
life and health insurance policies are
unilateral contracts
which of the following consists of an offer, acceptance, and consideration?
contract
a life insurance policy would be considered a wagering contract WITHOUT:
insurable interest
insurance policies are considered aleatory contracts because
performance is conditioned upon a future occurence
a policy of adhesion can only be modified by whom?
insurance company
at what point does an informal agreement become a binding contract?
when consideration is provided by one of the parties to the contract
