Contract Terms Flashcards
Consideration
The value given in exchange for the promise to pay the benefit
your Premuim for Insurance
Insurable interest
A financial interest in the life of another. In a position to lose something of value if the insured should die.  must exist at the time of application
- sp - sp
- Parents - child
- Gp - Gc
- Bp - Bp
Adhesion contract
A contract offered on a take it or leave it basis by an insurer, in which the insureds only option is to either except or reject the contract
-age, health, coverage
Conditional contract
A type of an agreement in which both parties must perform certain duties and follow rules of conduct to make the contract enforceable
Aleatory contract
A contract in which participating parties exchange unequal amounts
Unilateral contract
A contract that legally binds only one party to contractual obligations after the premium is paid
Buy Sell (Agreement)
A contract that establishes what will be done with a business in the event an owner or partner dies
Indemnify
To restore the insured the same condition as prior to loss with no intent of loss or gain
Utmost good faith
Both parties want the contract to work
- no conditions have to be meet 
Representations
Statements believed to be true to the applicants best knowledge (answers on the applications) 
Misrepresentations
A lie
-talking about medical questions
Concealment
Hiding the truth, failure to disclose material facts
Warranties
Statements guaranteed to be true— absolute truths
-facts
Fraud
A lie for financial gain
Proof of insurability
A statement about or evidence of a persons physical and/or mental health, persona; character, occupations, living habits, etc. used by the insurance company in assessing whether to accept a persons risk
-approve or reject application by medical or physical
